<PAGE>
================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[ ] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
The Finish Line, 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:
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(4) Date Filed:
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Notes:
<PAGE>
[LETTERHEAD OF FINISH LINE]
June 9, 1997
Dear Stockholder:
You are cordially invited to attend the 1997 Annual Meeting of Stockholders
of The Finish Line, Inc. on Thursday, July 17, 1997, at 9:00 a.m., to be held
at NBD Bank, One Indiana Square, Indianapolis, IN 46266, 5th Floor Auditorium.
Members of your Board of Directors and management look forward to greeting
those stockholders who are able to attend.
The accompanying Notice and Proxy Statement describe the matters to be acted
upon at the meeting.
It is important that your shares be represented and voted at the meeting.
Whether or not you plan to attend, please sign, date and mail the enclosed
proxy card at your earliest convenience. If you attend the meeting, you may
withdraw your proxy and vote in person.
Your interest and participation in the affairs of the Company are greatly
appreciated.
Respectfully,
/s/ Alan H. Cohen
Alan H. Cohen,
Chairman of the Board
and Chief Executive Officer
<PAGE>
THE FINISH LINE, INC.
3308 NORTH MITTHOEFFER ROAD
INDIANAPOLIS, INDIANA 46236
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 17, 1997
----------------
TO THE STOCKHOLDERS OF THE FINISH LINE, INC.:
Notice is hereby given that the 1997 Annual Meeting of Stockholders of The
Finish Line, Inc. to be held at NBD Bank, One Indiana Square, Indianapolis, IN
46266, 5th Floor Auditorium on Thursday, July 17, 1997 at 9:00 a.m., for the
following purposes:
1. To elect six directors; and
2. To transact such other business as may properly come before the meeting
or any adjournments thereof.
Only stockholders of record at the close of business on June 2, 1997, will
be entitled to notice of and to vote at the Annual Meeting and any
adjournments or postponements thereof.
By Order of the Board of Directors,
/s/ Steven J. Schneider
Steven J. Schneider,
Senior Vice President-Finance,
Chief Financial Officer and
Secretary
Indianapolis, Indiana
June 9, 1997
YOUR VOTE IS IMPORTANT, ACCORDINGLY, YOU ARE ASKED TO COMPLETE, SIGN, DATE
AND RETURN THE ACCOMPANYING PROXY CARD IN THE ENVELOPE PROVIDED, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
THE FINISH LINE, INC.
3308 N. MITTHOEFFER ROAD
INDIANAPOLIS, INDIANA 46236
----------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
JULY 17, 1997
----------------
GENERAL INFORMATION
This Proxy Statement and the accompanying Notice of Annual Meeting and Proxy
Card are being mailed on or about June 9, 1997 in connection with the
solicitation of proxies by the Board of Directors of The Finish Line, Inc.
("TFL" or the "Company") for use at the 1997 Annual Meeting of Stockholders of
the Company (the "Annual Meeting") to be held at NBD Bank, One Indiana Square,
Indianapolis, IN 46266, 5th Floor Auditorium, on Thursday, July 17, 1997, at
9:00 a.m., and any adjournment or postponement thereof. At the Annual Meeting,
the Company's stockholders will be asked to elect six directors, and to vote
on such other matters as may properly come before the Annual Meeting.
Throughout this Proxy Statement, fiscal 1997, fiscal 1996 and fiscal 1995
represent the fiscal years ended March 1, 1997, February 29, 1996, and
February 28, 1995, respectively.
PERSONS MAKING THE SOLICITATION
The Company is making this solicitation and will bear the expenses of
preparing, printing and mailing proxy materials to the Company's stockholders.
In addition, proxies may be solicited personally or by telephone or fax by
officers or employees of the Company, none of whom will receive additional
compensation therefore. The Company will also reimburse brokerage houses and
other nominees for their reasonable expenses in forwarding proxy materials to
beneficial owners of the Class A Common Stock.
VOTING AT THE MEETING
Stockholders of record at the close of business on June 2, 1997 of the
Company's Class A Common Stock, par value $.01 per share ("Class A Common
Stock"), and Class B Common Stock, par value $.01 per share ("Class B Common
Stock"), are entitled to notice of and to vote at the Annual Meeting and any
adjournment or postponement thereof. On that date, 17,995,342 shares of Class
A Common Stock and 7,967,206 shares of Class B Common Stock were outstanding
and entitled to vote. Each outstanding share of Class A Common Stock entitles
the holder thereof to one vote and each outstanding share of Class B Common
Stock entitles the holder to ten votes.
The six nominees receiving the highest number of affirmative votes of the
shares present or represented and entitled to be voted for them shall be
elected as directors. Votes withheld from any director are counted for
purposes of determining the presence or absence of a quorum for the
transaction of business. The Company believes that abstentions should be
counted for purposes of determining whether a quorum is present at the Annual
Meeting for the transaction of business. In the absence of controlling
precedent to the contrary, the Company intends to treat abstentions with
respect to the election of directors in this manner. The Company intends to
count broker non-votes as present or represented for purposes of determining
the presence or absence of a quorum for the transaction of business.
Stockholders do not have the right to cumulate their votes in the election
of directors.
1
<PAGE>
REVOCABILITY OF PROXY
A proxy may be revoked by a stockholder prior to the voting at the Annual
Meeting by written notice to the Secretary of the Company, by submission of
another proxy bearing a later date or by voting in person at the Annual
Meeting. Such notice or later proxy will not affect a vote on any matter taken
prior to the receipt thereof by the Company. The mere presence at the Annual
Meeting of a stockholder who has appointed a proxy will not revoke the prior
appointment. If not revoked, the proxy will be voted at the Annual Meeting in
accordance with the instructions indicated on the Proxy Card by the
stockholders or, if no instructions are indicated, will be voted FOR the slate
of directors described herein, and as to any other matter that may be properly
brought before the Annual Meeting, in accordance with the judgment of the
proxy.
2
<PAGE>
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of June 2, 1997, information relating to
the beneficial ownership of the Company's common stock by each person known to
the Company to be the beneficial owner of more than five percent of the
outstanding shares of Class A Common Stock or Class B Common Stock, by each
director, by each of the executive officers named below, and by all directors
and executive officers as a group.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP AS OF JUNE 2, 1997
--------------------------------------------------------
CLASS A CLASS B
------------------------ ---------------------
NUMBER OF % OF NUMBER OF % OF TOTAL
NAME SHARES(1)(2) CLASS(3) SHARES(1) CLASS(3) SHARES
---- ------------ -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
Alan H. Cohen........... 94,000(4) (11) 2,521,898(5) 31.7% 2,615,898
David I. Klapper........ 97,000(4) (11) 2,543,698(6) 31.9% 2,640,698
David M. Fagin.......... -- -- 899,241(7) 11.3% 899,241
Larry J. Sablosky....... 70,000(4) (11) 1,805,279(8) 22.7% 1,875,279
Joseph W. Wood.......... 17,000(9) (11) -- -- 17,000
Steven J. Schneider..... 26,502(9) (11) -- -- 26,502
Donald E. Courtney...... 32,100(9) (11) -- -- 32,100
George S. Sanders....... 13,900(9) (11) -- -- 13,900
Michael L. Marchetti.... 1,000(9) (11) -- -- 1,000
Thomas R. Sicari........ 1,500(9) (11) -- -- 1,500
Kevin S. Wampler........ 5,700(9) (11) -- -- 5,700
Kevin G. Flynn.......... 600(9) (11) -- -- 600
Robert A. Edwards....... 7,000(9) (11) -- -- 7,000
Jonathan K. Layne....... 4,000(9) (11) -- -- 4,000
Jeffrey H. Smulyan...... 24,000(9) (11) -- -- 24,000
Pilgrim Baxter & Ass.
Ltd.................... 1,978,800(10) 11.0% -- -- 1,978,800
1255 Drummers Lane,
Ste 300
Wayne, PA 19087-1590
AIM Management Group.... 1,354,600(10) 7.5% -- -- 1,354,600
11 Greenway Plaza, Ste
1919
Houston, TX 77046-1173
Navellier & Associates.. 1,321,890(10) 7.3% -- -- 1,321,890
1 East Liberty Street,
3rd Fl
Reno, NV 89501
Husic Capital
Management.............. 1,265,100(10) 7.0% -- -- 1,265,100
555 California St.,
Ste 2900
San Francisco, CA
94104
Nicholas Applegate
Capital................ 1,114,728(10) 6.2% -- -- 1,114,728
600 W. Broadway, 29th
Fl
San Diego, CA 92101
Invesco Funds Group,
Inc. ................... 1,063,800(10) 5.9% -- -- 1,063,800
7800 E. Union Avenue
Denver, CO 80237
All directors and
executive officers as a
group (15 persons)..... 392,702 2.2% 7,770,116 97.5% 8,162,818
</TABLE>
- --------
(1) Each executive officer and director has sole voting and investment power
with respect to the shares listed, unless otherwise indicated and the
address for the executive officers and directors is: 3308 N. Mitthoeffer
Road, Indianapolis, Indiana 46236.
(2) If shares of Class B Common Stock are owned by the named person or group,
excludes shares of Class B Common Stock convertible into a corresponding
number of Class A Common Stock.
3
<PAGE>
(3) The shares owned by each person, or by the group, and the shares included
in the total number of shares outstanding have been adjusted, and the
percentage owned (where such percentage exceeds 1%) has been computed, in
accordance with Rule 13d-3(d)(1) under the Securities Exchange Act.
(4) Represents shares gifted to a private family foundation which is
controlled by the named person.
(5) Includes 859,101 shares of Class B Common Stock held as Trustee of
various trusts for the benefit of his minor children and 300,000 shares
of Class B Common Stock held by a family partnership in which Mr. Cohen
serves as general partner.
(6) Includes 855,833 shares of Class B Common Stock held as Trustee of
various trusts for the benefit of his minor children and 509,526 shares
of Class B Common Stock held by a family partnership in which Mr. Klapper
serves as general partner.
(7) Includes 13,164 shares held by Mr. Fagin as custodian for his minor
children and 202,910 shares held by a family partnership of which Mr.
Fagin is a partner. Excludes an aggregate of 197,090 shares held by the
same family partnership which are deemed beneficially owned by Mr.
Fagin's son and daughter (each of whom is over the age of 21) and by Mr.
Fagin's former spouse.
(8) Includes 372,867 shares of Class B Common Stock held as Trustee of two
trusts for the benefit of his minor children and 119,496 shares of Class
B Common Stock held by a trust for Mr. Sablosky's minor children under a
Trust Agreement pursuant to which he serves as a co-trustee. In addition,
includes 9,968 shares held by Mr. Sablosky's spouse and 11,632 shares
held by Mr. Sablosky as custodian for his minor children.
(9) Includes the following shares issuable upon exercise of options which are
exercisable within 60 days of June 2, 1997:
<TABLE>
<S> <C>
Joseph W. Wood..................................................... 17,000
Steven J. Schneider................................................ 20,502
Donald E. Courtney................................................. 30,500
George S. Sanders.................................................. 13,900
Michael L. Marchetti............................................... 1,000
Thomas R. Sicari................................................... 1,500
Kevin S. Wampler................................................... 5,700
Kevin G. Flynn..................................................... 400
Robert A. Edwards.................................................. 6,300
Jonathan K. Layne.................................................. 4,000
Jeffrey H. Smuylan................................................. 18,000
</TABLE>
(10) This information is based solely on a Schedule 13G filed with the
Securities Exchange Commission, a copy of which was provided to the
Company. The respective dates of the Schedule 13G(s) are as follows:
<TABLE>
<S> <C>
Pilgrim Baxter & Associates, Ltd. ............................... 02/14/97
AIM Management................................................... 02/12/97
Navellier & Associates........................................... 02/15/97
Husic Capital.................................................... 04/07/97
Nicholas Applegate............................................... 02/03/97
Investco......................................................... 02/14/97
</TABLE>
(11) Less than 1% of the shares of Class A Common Stock outstanding.
4
<PAGE>
ELECTION OF DIRECTORS
A Board of six directors is to be elected at the 1997 Annual Meeting. The
persons named in the Proxy Card as proxies for this meeting will vote in favor
of each of the following nominees as directors of the Company unless otherwise
indicated by the stockholder on the Proxy Card. Directors elected at the 1997
Annual Meeting will hold office until the next annual meeting of stockholders
of the Company, and until their successors are duly elected and qualified,
except in the event of their death, resignation, or removal. Management has no
reason to believe that any of the nominees will be unable or unwilling to
serve if elected. If any nominee should become unavailable prior to the
election, the accompanying Proxy Card will be voted for the election in his or
her stead of such other person as the Board of Directors may recommend.
NOMINEES
The nominees for election as directors of the Company are Alan H. Cohen,
David I. Klapper, David M. Fagin, Larry J. Sablosky, Jonathan K. Layne, and
Jeffrey H. Smulyan. See "Management--Executive Officers and Directors" for
additional information concerning the nominees.
BOARD OF DIRECTORS' RECOMMENDATION.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
SLATE OF NOMINEES SET FORTH ABOVE. PROXIES SOLICITED BY THE BOARD OF DIRECTORS
WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY OTHERWISE ON THEIR PROXY CARDS.
5
<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The executive officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
EXECUTIVE
OFFICER OR
DIRECTOR
NAME AGE POSITION SINCE
---- --- -------- ----------
<S> <C> <C> <C>
Alan H. Cohen............... 50 Chairman of the Board, 1976
President and Chief Executive
Officer
Executive Vice President,
David I. Klapper............ 48 Director 1976
Executive Vice President,
David M. Fagin.............. 53 Director 1982
Executive Vice President,
Larry J. Sablosky........... 48 Director 1982
Senior Vice President-
Joseph W. Wood.............. 50 Merchandise and Marketing 1995
Steven J. Schneider......... 41 Senior Vice President-Finance, 1989
Chief Financial Officer and
Secretary
Senior Vice President-MIS and
Donald E. Courtney.......... 42 Distribution 1989
George S. Sanders........... 39 Senior Vice President-Real 1994
Estate and Store Development
Senior Vice President-Store
Michael L. Marchetti........ 46 Operations 1995
Vice President-General
Thomas R. Sicari............ 43 Merchandise Manager 1997
Kevin S. Wampler............ 34 Vice President-Corporate 1997
Controller and Assistant
Secretary
Kevin G. Flynn.............. 33 Vice President-Marketing 1997
Robert A. Edwards........... 35 Vice President-Distribution 1997
Jonathan K. Layne........... 43 Director 1992
Jeffrey H. Smulyan.......... 49 Director 1992
</TABLE>
Mr. Alan H. Cohen, a co-founder of the Company, has served as President and
Chief Executive Officer and a director of the Company since May 1982. Since
1976, Mr. Cohen has been involved in the athletic retail business as principal
co-founder of Athletic Enterprises, Inc. (one of the predecessor companies of
the Company). Mr. Cohen is an attorney, and practiced law from 1973 through
1981.
Mr. David I. Klapper, a co-founder of the Company, has as served as
Executive Vice President and a director of the Company since May 1982. Since
1976, Mr. Klapper has been involved in the athletic retail business as
principal co-founder of Athletic Enterprises, Inc. (one of the predecessor
companies of the Company).
Mr. David M. Fagin, a co-founder of the Company, has served as Executive
Vice President and a director of the Company since May 1982. Prior to 1982,
Mr. Fagin was self employed as a manufacturer's representative for sporting
goods companies. Mr. Fagin has been involved in the athletic retail industry
for over 25 years.
Mr. Larry J. Sablosky, a co-founder of the Company, has served as Executive
Vice President and a director of the Company since May 1982. Prior to 1982,
Mr. Sablosky was employed in a family retail business for over 10 years. Mr.
Sablosky has been involved in the retail industry for over 20 years.
Mr. Joseph W. Wood has served as Senior Vice President-Merchandise and
Marketing of the Company since March 1997 and as Vice President and General
Merchandise Manager of the Company since January 1995. From May 1993 to
December 1994, Mr. Wood served as Executive Vice President and Chief Operating
Officer of Just For Feet, an athletic footwear retailer. From October 1986 to
May 1993, Mr. Wood served as Senior Vice President and General Merchandise
Manager of the Athlete's Foot Group, a mall based athletic footwear retailer.
6
<PAGE>
Mr. Steven J. Schneider has served as Senior Vice President-Finance, Chief
Financial Officer and Secretary of the Company since March 1997 and as Vice
President-Finance and Chief Financial Officer of the Company since April 1989.
From August 1984 to March 1989, Mr. Schneider was employed as Assistant
Controller for Paul Harris Stores, Inc. a women's apparel retailer. Mr.
Schneider, a Certified Public Accountant, was employed by a national
accounting firm for two years and has been engaged in various financial
positions in the retail industry for 15 years.
Mr. Donald E. Courtney has served as Senior Vice President-MIS and
Distribution of the Company since March 1997 and as Vice President-MIS and
Distribution of the Company since August 1989. From August 1988 to August
1989, Mr. Courtney served as Director of MIS and Distribution for the Company.
From August 1976 to August 1988, Mr. Courtney was employed by Guarantee Auto
Stores, Inc., an automotive retailer. At the time Mr. Courtney left Guarantee
Auto Stores, he held the position of Vice President-MIS and Distribution.
Mr. Courtney has been involved in the retail industry for 18 years.
Mr. George S. Sanders has served as Senior Vice President-Real Estate and
Stove Development of the Company since March 1997 and as Vice President-Real
Estate and Store Construction since April 1994. From February 1993 to April
1994, Mr. Sanders served as Director of Real Estate of the Company. From 1983
to February 1993, Mr. Sanders was employed by Melvin Simon and Associates, a
real estate developer and manager. At the time Mr. Sanders left Melvin Simon
and Associates, he held the position of Sr. Leasing Representative.
Mr. Michael L. Marchetti has served as Senior Vice President-Store
Operations of the Company since March 1997 and as Vice President-Store
Operations since September 1995. From May 1990 to September 1995, Mr.
Marchetti was employed by Champs Sports, a division of Woolworth Corporation,
the last five years of which he served as Regional Vice President. Mr.
Marchetti has been involved in the retail industry for over 25 years.
Mr. Thomas R. Sicari has served as Vice President-General Merchandise
Manager of the Company since March 1997. He has been employed by the Company
since April 1995 and prior to being an officer served a General Merchandise
Manager. Previously Mr. Sicari was employed as a buyer by The Sports Authority
an "athletic superstore" retailer from March 1994 to April 1995. Mr. Sicari
was employed by Champs ( a division of Kinney Corp.) a specialty athletic mall
based retailer from March 1983 through March 1994. At the time Mr. Sicari left
Champs he held the position of Head Buyer.
Mr. Kevin S. Wampler has served as Vice President-Corporate Controller and
Assistant Secretary of the Company since March 1997. Mr. Wampler is a CPA and
has been employed by the Company since June 1993 as Corporate Controller. Mr.
Wampler was previously employed by a national accounting firm from July 1986
to June 1993. At the time Mr. Wampler left the national accounting firm, he
held the position of Audit Manager.
Mr. Kevin G. Flynn has served as Vice President-Marketing of the Company
since March 1997. Mr. Flynn has been employed by the Company since November
1994 and prior to election as an officer, held the position of Marketing
Director. Mr. Flynn was previously employed from July 1992 to November 1994 as
Associate Media Director for Caldwell Van Riper, a regional advertising
agency.
Mr. Robert A. Edwards has served as Vice President-Distribution of the
Company since March 1997. Mr. Edwards has been employed by the Company since
June 1983 and prior to his election as an officer, held the position of
Director of Distribution.
Mr. Jonathan K. Layne has served as a director of the Company since June
1992. Mr. Layne has been a partner of the law firm of Gibson, Dunn & Crutcher
LLP since 1987, where he specializes in corporate and securities law matters.
Mr. Layne was an associate with Gibson, Dunn & Crutcher LLP from 1979 to 1986.
Mr. Layne is also a member of the Board of Directors of Amwest Insurance
Group, Inc., an insurance holding company, K-Swiss Inc., a manufacturer of
athletic footwear and Maxwell Shoe Company Inc., a manufacturer of women's
casual and dress footwear.
7
<PAGE>
Mr. Jeffrey H. Smulyan has served as a director of the Company since June
1992. Mr. Smulyan has served since 1986 as Chairman of the Board and President
of Emmis Broadcasting Corporation, an owner and operator of radio stations.
Mr. Smulyan served as Chairman of the Seattle Mariners professional baseball
team from 1989 until 1992 and was the principal owner of Seattle Baseball,
L.P., which owned the Mariners prior to their sale in July 1992.
Each director holds office until the next annual meeting of stockholders or
until his successor has been elected and qualified. Officers are appointed by
and serve at the discretion of the Board of Directors. There are no family
relationships among any directors or executive officers of the Company.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held 7 meetings in fiscal 1997 and all directors
attended at least 75 percent of the meetings of the Board and Board Committees
of which they were members.
The Board of Directors has two committees. The Audit Committee is comprised
of Messrs. Cohen, Layne, and Smulyan. The Compensation and Stock Option
Committee is comprised of Messrs. Smulyan and Layne. There is no committee
performing the function of a Nominating Committee.
The Audit Committee met two times during fiscal 1997. The responsibilities
of the Audit Committee include recommending to the Board the selection of the
independent auditors and reviewing the Company's internal accounting controls.
The Audit Committee is authorized to conduct such reviews and examinations as
it deems necessary or desirable with respect to the Company's accounting and
financial practices and policies, and the relationship between the Company and
its independent auditors, including the availability of Company records,
information and personnel.
The Compensation and Stock Option Committee met three times during fiscal
1997. The Compensation and Stock Option Committee focuses on executive
compensation, the administration of the Company's stock option and stock
purchase plans and making decisions on the granting of discretionary bonuses.
8
<PAGE>
EXECUTIVE COMPENSATION
The following Summary Compensation Table shows compensation paid by the
Company for services rendered during fiscal years 1997, 1996, and 1995 for the
person who was Chief Executive Officer at the end of the last fiscal year and
the five most highly compensated executive officers of the Company ("Named
Officers") whose salary and bonus exceeded $100,000 in fiscal year 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
--------------------------------
AWARDS PAYOUTS
------------------------ -------
ANNUAL COMPENSATION SECURITIES
------------------- RESTRICTED UNDERLYING LTIP ALL OTHER
SALARY BONUS STOCK OPTIONS/SAR'S PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($)(1) AWARD(S) $ (#) ($) ($)(3)
--------------------------- ---- --------- --------- ---------- ------------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Alan H. Cohen........................... 1997 265,000 159,000 -- -- -- --
CEO, President and 1996 265,000 116,706 -- -- -- --
Chairman of the Board 1995 250,000 90,000 -- -- -- 30,000
Larry J. Sablosky....................... 1997 175,000 70,000 -- -- -- 18,390
Executive Vice President, 1996 225,000 99,090 -- -- -- 17,879
Director 1995 250,000 90,000 -- -- -- 30,000
Joseph W. Wood.......................... 1997 187,400 74,960 -- -- -- 18,390
Sr. Vice President-- 1996 172,632 80,685(2) -- 10,000 -- --
Merchandise and Marketing 1995 26,559 -- -- 80,000 -- --
Steven J. Schneider..................... 1997 160,000 64,000 -- -- -- 18,390
Sr. Vice President of Finance, 1996 145,200 42,631 -- 10,000 -- 17,879
Chief Financial Officer 1995 132,000 31,680 -- 10,000 -- 16,303
and Secretary
David I. Klapper........................ 1997 125,000 50,000 -- -- -- 18,391
Executive Vice President, 1996 175,000 51,380 -- -- -- 17,879
Director 1995 250,000 90,000 -- -- -- 30,000
</TABLE>
- --------
(1) Cash bonuses for services rendered in each fiscal year have been listed in
the year earned; however the amounts listed were actually paid in the
subsequent fiscal year, except as noted in Note (2) below.
(2) $30,000 of the stated amount was paid in January 1996 as a signing bonus
which was paid at the end of Mr. Wood's first year of employment.
(3) The stated amounts are Company contributions to The Finish Line, Inc.
Profit Sharing Plan.
DIRECTOR COMPENSATION
Directors who are employees of the Company are not compensated for serving
as directors. Directors who are not employees of the Company are paid $2,500
per annum and an additional $2,500 per meeting for attending regular meetings
of the Board of Directors and are reimbursed for expenses incurred in
attending regular, special and committee meetings. In addition, Directors who
are not employees of the Company receive options to purchase 6,000 shares of
Class A Common Stock upon their first election to the Board and an additional
4,000 options for each year they serve on the Board.
9
<PAGE>
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
Shown below is information with respect to unexercised options to purchase
the Company's Class A Common Stock under the Incentive Plan.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS AT
AT FY-END (#) FY-END ($)(1)
SHARES ACQUIRED VALUE ------------- -----------------
ON EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
---- --------------- --------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Alan H. Cohen........... -- -- -- -- -- --
David I. Klapper........ -- -- -- -- -- --
Larry J. Sablosky....... -- -- -- -- -- --
Joseph W. Wood.......... 8,000 158,520 17,000 65,000 318,188 1,148,687
Steven J. Schneider..... 60,000 1,113,930 20,502 19,500 349,408 342,500
</TABLE>
- --------
(1) Represents the difference between the closing price of the Company's Class
A Common Stock on the NASDAQ National Market System on February 28, 1997
($21.50) and the exercise price of the options.
10
<PAGE>
COMPENSATION AND STOCK OPTION COMMITTEE REPORT
SCOPE OF COMMITTEE'S WORK
The Compensation and Stock Option Committee of the Board of Directors (the
"Committee") administers the Company's 1992 Employee Stock Incentive Plan, as
amended, reviews the Company's compensation plans, programs and policies for
executive officers, monitors the performance and compensation of executive
officers and other key employees and makes appropriate recommendations and
reports to the full Board of Directors concerning matters of executive
compensation.
SUMMARY OF COMPENSATION POLICIES FOR CEO AND EXECUTIVE OFFICERS
The Company's philosophy is to maintain compensation programs which attract,
retain and motivate senior management with economic incentives which are
directly linked to financial performance and increased stockholder value. The
key elements of the Company's executive compensation program consist of a base
salary, potential for an annual bonus directly linked to overall Company
performance and the grant of stock options and other stock incentive awards
intended to encourage achievement of superior results over time and to
directly align executive officer and stockholder economic interests.
CEO COMPENSATION
The Committee believes the Chief Executive Officer's compensation should be
heavily influenced by Company performance. For the period from the closing of
the Company's initial public offering on June 16, 1992 through February 28,
1995, Mr. Alan H. Cohen, the Company's Chief Executive Officer, was
compensated at the annualized base rate of $250,000. For the latest two fiscal
years, Mr. Cohen's base compensation was increased to $265,000. See "Executive
Compensation--Summary Compensation Table". In March 1996, the Committee
established a performance bonus program for Mr. Cohen (as well as for the
Company's other senior executive officers) which, for the fiscal year ended
March 1, 1997, was based on four factors:
1. Increase in 1997 income before taxes as compared to 1997 income before
taxes
2. Same store sales increases
3. Total sales increases
4. Total square footage from retail stores added
A bonus of between 0% and 60% of base compensation, up to a maximum of
$159,000 was payable to Mr. Cohen under the program. The Committee believes
this arrangement provided the Chief Executive Officer (as well as the
Company's other senior executive officers) with significant incentive and
aligned what amounted to a bonus ($159,000 for fiscal 1997) equal to a
meaningful percentage (60% for fiscal 1997) of his annual base salary directly
to the Company's economic performance.
While the Committee believes that the use of stock options which vest over a
period of time are an effective device to link individual compensation with
increased stockholder values, because of Mr. Cohen's substantial equity
position in the Company (2,521,898 shares of Class B Common Stock as of June
2, 1997), Mr. Cohen requested that he not be eligible at the current time for
the grant of stock options or other incentive awards under the Company's
Incentive Plan. Consequently, no options or incentive awards were granted to
Mr. Cohen during fiscal 1997.
EXECUTIVE OFFICERS COMPENSATION
The Committee has adopted similar policies with respect to overall
compensation of the Company's other senior executive officers. The salaries of
Messrs. Sablosky and Klapper were identical to Mr. Cohen for the period June
16, 1992 through February 28, 1995 ($250,000 on an annualized basis). For
fiscal 1996, Messrs. Sablosky and Klapper were compensated at $225,000 and
$175,000, respectively. For fiscal 1997, Messrs. Sablosky and Klapper were
compensated at $175,000 and $125,000, respectively. These salary levels
11
<PAGE>
were established by considering the salaries of similar executives of
comparable companies both within and outside the industry in which the Company
operates as well as the relative contributions of these executives to the
Company. Such executive officers were also eligible on the same terms for the
bonus program described above for Mr. Cohen. Finally, due to their substantial
equity positions in the Company, Messrs. Sablosky and Klapper (who owned as of
June 2, 1997 1,805,279, and 2,543,698 shares of Class B Common Stock,
respectively), have also requested that they not be eligible at the current
time for the grant of stock options or other incentive awards under the
Incentive Plan. Consequently, no options or incentive awards were granted to
these executives during fiscal 1997.
The Company's Senior Vice President-Merchandise and Marketing, Mr. Wood, was
compensated at an annual base salary of $187,400 during fiscal 1997. The
Company's Senior Vice President-Finance, Chief Financial Officer and
Secretary, Mr. Schneider, was compensated at an annual base salary of $160,000
during fiscal 1997. In addition, Messrs. Wood and Schneider participated in a
bonus plan similar to the plan described above, subject to a maximum bonus of
40% of annual base salary.
The Company's Chief Executive Officer and the other Named Officers were also
eligible to participate in the Company's Profit Sharing Plan currently up to a
maximum annual contribution of $30,000 per person for the Company's most
recent plan year ended October 31, 1996. See "Executive Compensation--Summary
Compensation Table".
Under current law, income tax deductions for compensation paid by publicly-
traded companies may be limited to the extent total compensation (including
base salary, annual bonus, restricted stock awards, stock options exercises,
and non-qualified benefits) for certain executive officers exceeds $1 million
in any one year. Under the law, the deduction limit does not apply to payments
which qualify as "performance based." To qualify as "performance based",
compensation payments must be made from a plan that is administered by a
compensation committee of the Board of Directors which is comprised solely of
two or more outside directors. In addition, the material terms of the plan
must be disclosed to and approved by stockholders, and the Committee must
certify that the performance goals were achieved before payments can be
awarded.
To the extent readily determinable, and as one of the factors in its
consideration of compensation matters, the Committee also considers the
anticipated tax treatment to the Company and to the executives of various
payments and benefits. However, since some types of compensation payments and
their deductibility depend upon the timing of an executive's exercise of stock
options rights (e.g., the spread on exercise of non-qualified options), and
because interpretations and changes in the tax laws and other factors beyond
the Committee's control may also affect the deductibility of compensation, the
Committee will not necessarily limit executive compensation to that which is
deductible under applicable provisions of the Internal Revenue Code. The
Committee will consider various alternatives to preserving the deductibility
of compensation payments and benefits to the extent reasonably practicable and
to the extent consistent with its other compensation objectives.
The Committee believes that the current compensation arrangements provide
the Chief Executive Officer and the other executive officers with incentive to
perform at superior levels and in a manner which is directly aligned with the
economic interests of the Company's stockholders.
COMPENSATION AND STOCK
OPTION COMMITTEE
Jonathan K. Layne
Jeffrey H. Smulyan
May 28, 1997
12
<PAGE>
The above report of the Compensation and Stock Option Committee will not be
deemed to be incorporated by reference into any filing by the Company under
the Securities Act of 1933 or the Securities Exchange Act of 1934, except to
the extent that the Company specifically incorporates the same by reference.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Smulyan and Layne comprise the Compensation and Stock Option
Committee.
Mr. Layne is a partner of the law firm of Gibson, Dunn & Crutcher LLP, which
has provided legal services to the Company. The Company expects that such law
firm will continue to render legal services to the Company in the future.
13
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
COMPARISON OF FIFTY-SIX MONTH CUMULATIVE TOTAL RETURN
AMONG THE FINISH LINE, INC.
S&P 500 INDEX AND PEER GROUP INDEX (1)
The Stock Price Performance Graph below shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period THE FINISH S&P
(Fiscal Year Covered) LINE, INC. 500 INDEX Peer Group
- ------------------- ---------- --------- ----------
<S> <C> <C> <C>
Measurement Pt- 6/9/92(2) $100 $100 $100
FYE 2/26/93 $181.0 $117.6 $141.2
FYE 2/28/94 $ 77.4 $139.2 $161.6
FYE 2/28/95 $ 60.7 $141.2 $126.1
FYE 2/29/96 $ 83.3 $196.7 $ 79.7
FYE 2/28/97 $409.5 $234.8 $ 73.6
</TABLE>
ASSUMES $100 INVESTED ON JUNE 9, 1992
AND ASSUMES DIVIDENDS REINVESTED THROUGH
FISCAL YEAR ENDING MARCH 1, 1997
- --------
(1) Peer group is: SIC Codes 5940 through 5949 (20 actively trading issues
during relevant period). SIC codes beginning with 594 represent
miscellaneous Shopping Goods Stores which, in management's opinion, most
closely represents the peer group of the Company.
(2) The first day of trading of the Company's Class A Common Stock on the
NASDAQ National Market System.
14
<PAGE>
EMPLOYEE INCENTIVE STOCK OPTION PLAN
General
On March 27, 1992, the Board of Directors adopted the 1992 Employee Stock
Incentive Plan (the "Incentive Plan"), the purpose of which is to enable the
Company to attract, retain and motivate its employees by providing for or
increasing their proprietary interest in the Company. The Incentive Plan was
amended by the Board of Directors on April 20, 1995 and by the Company's
Stockholders on July 20, 1995 to increase the maximum number of shares of
Class A Common Stock issuable from 1,000,000 to 1,700,000. Any person who is
employed by the Company or any subsidiary of the Company is eligible to
participate in the Incentive Plan. As of June 2, 1997 approximately 6,000
persons were eligible.
The Incentive Plan authorizes the issuance of up to 1,700,000 shares of
Class A Common Stock, subject to adjustments under certain circumstances. As
of June 2, 1997, options to purchase an aggregate of 1,445,400 shares of Class
A Common Stock at an average exercise price of $8.07 per share had been
granted (net of cancellations) under the Incentive Plan to a total of 148
persons leaving 254,600 options available for future grant. Included in these
grants are options to purchase an aggregate of 210,000 shares granted to two
of the named executive officers at an average exercise price of $4.39. Of
these options, 87,998 have been exercised at an average price of $5.01 per
share. All unexercised options, including those granted to the executives
above, total 1,096,852 shares and vest over the following years:
<TABLE>
<CAPTION>
#
SHARES
-------
<S> <C>
Currently Vested................. 244,376
Vest During FYE 2/1998........... 270,355
Vest During FYE 2/1999........... 269,926
Vest During FYE 2/2000........... 188,875
Vest During FYE 2/2001........... 123,320
</TABLE>
The Incentive Plan provides that it shall be administered by the
Compensation and Stock Option Committee consisting of two or more directors,
each of whom is a "disinterested person." A "disinterested person" is
generally one who is not eligible and has not been eligible at any time within
one year prior to becoming a member of the Compensation and Stock Option
Committee for selection as a person to whom benefits may be granted pursuant
to the Incentive Plan or any other non-formula plan of the Company or any of
its affiliates. Subject to the provisions of the Incentive Plan, the
Compensation and Stock Option Committee has full and final authority to select
employees to whom awards will be granted thereunder, to grant such awards and
to determine the number of shares to be sold or issued pursuant thereto and
the terms and provisions of such awards, including, without limitation, the
terms relating to vesting, exercise price and form of payment.
The Incentive Plan authorizes the Compensation and Stock Option Committee to
award eligible employees any type of benefits that may involve the issuance of
shares of Class A Common Stock or other benefits that are derived from the
value of shares of Class A Common Stock. Benefits are not restricted to any
specified form or structure and may include, without limitation, stock
bonuses, restricted stock, stock options, and other benefits. Any award may
consist of one such arrangement or two or more of them in tandem or in the
alternative. On May 27 1997, the last sale price of the Company's Class A
Common Stock on the NASDAQ National Market System was $12.25 per share.
No awards may be granted under the Incentive Plan after March 27, 2002, and
no shares of Class A Common Stock may be issued under the Incentive Plan after
March 27, 2012.
The Incentive Plan may be amended or terminated by the Board of Directors at
any time; provided, however, that no such amendment or termination can deprive
the recipient of an award granted under the Incentive Plan, without the
consent of such recipient, of any of his or her rights thereunder or with
respect thereto.
15
<PAGE>
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
General
On July 21, 1994, the stockholders adopted the Non-Employee Director Stock
Option Plan (the "Director Plan"), the purpose of which is to enable the
Company to attract, retain and motivate its non-employee directors by
providing for or increasing their proprietary interest in the Company. Any
non-employee director of the Company or any subsidiary of the Company is
eligible to participate in the Director Plan. As of June 2, 1997, two persons
were eligible.
The Director Plan authorizes the issuance of up to 150,000 shares of Class A
Common Stock, subject to adjustments under certain circumstances. As of June
2, 1997, options to purchase an aggregate of 36,000 shares of Class A Common
Stock at an average exercise price of $6.42 per share had been granted under
the Director Plan to a total of two persons. Of these options, 14,000 have
been exercised at an average price of $4.93 per share. The unexercised options
total 22,000 shares and vest over the following years:
<TABLE>
<CAPTION>
# SHARES
--------
<S> <C>
Currently Vested................ 14,000
Vest During FYE 2/98............ 8,000
</TABLE>
The Director Plan is intended to be self-governing. To this end, the
Director Plan requires no discretionary action by any administrative body with
regard to any transaction under the Director Plan. To the extent, if any, that
any questions or interpretation arise, they will be resolved by the Board.
Upon initial election or appointment of any non-employee director to the
Board or upon a continuing director becoming a non-employee director, such
non-employee director will become eligible to receive an option to purchase
6,000 shares of the Company's Class A Common Stock to be granted on the date
of the next Annual Meeting of Stockholders pursuant to the terms and
conditions described in the Director Plan.
In addition, each non-employee director will be automatically granted, on a
annual basis, a non-qualified stock option to purchase 4,000 shares of the
Company's Class A Common stock on the date of each Annual Meeting of
Stockholders commencing with the Annual Meeting of Stockholders at which the
non-employee director is granted the 6,000 share option pursuant to the
foregoing paragraph. The per share exercise price of the option will be the
fair market value of a share of the Company's Class A Common Stock on the date
of grant, defined as the closing price of the Company's Class A Common Stock
on the NASDAQ National Market System (or such other securities market on which
the Company's Class A common Stock is primarily traded on such date). Each
option will have a term of ten years and shall become fully exercisable one
year after grant. On May 27, 1997, the last sale price of the Company's Class
A Common Stock on the NASDAQ National Market System was $12.25 per share.
No awards may be granted under the Director Plan after July 21, 2004, and no
shares of Class A Common Stock may be issued under the Director Plan after
July 21, 2014.
The Director Plan may be amended or terminated by the Board of Directors at
any time; provided, however, that no such amendment or termination can deprive
the recipient of an award granted under the Director Plan, without the consent
of such recipient, of any of his or her rights thereunder or with respect
thereto.
16
<PAGE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP was the Company's certified public accountant for fiscal
1997. During fiscal 1997, the Company also engaged Ernst & Young LLP to render
certain non-audit professional services involving assistance on tax planning
matters and general consultations.
The appointment of auditors is approved annually by the Board of Directors
which is based in part on the recommendation of the Audit Committee. In making
its recommendation, the Audit Committee reviewed both the audit scope and
estimated audit fees for the coming year. Ernst & Young LLP has been selected
by the Audit Committee and the Board of Directors for the current year.
Stockholder approval is not sought in connection with this selection. Each
professional service performed by Ernst & Young LLP during fiscal 1997 was
reviewed, and the possible effect of such service on the independence of the
firm was considered, by the Audit Committee. Representatives of Ernst & Young
LLP plan to be present at the Annual Meeting of Stockholders and will be given
an opportunity to make a statement if they desire to do so and will respond to
questions from stockholders.
PROPOSALS OF STOCKHOLDERS
Proposals which stockholders intend to present at the 1998 Annual Meeting of
Stockholders of the Company must be received by the Secretary of the Company
at its principal offices (3308 N. Mitthoeffer Road, Indianapolis, Indiana
46236) no later than February 10, 1998.
MISCELLANEOUS
The Company's Annual Report to Stockholders for the fiscal year ended March
1, 1997, including the financial statements and related notes thereto,
together with the report of the independent auditors and other information
with respect to the Company, accompanies this Proxy Statement.
The Company is not aware of any other business to be presented at the 1997
Annual Meeting. If matters other than those described should properly arise at
the meeting, the proxies will vote on such matters in accordance with their
best judgments.
By Order of the Board Of Directors
/s/ Steven J. Schneider
Steven J. Schneider,
Senior Vice President-Finance, Chief
Financial Officer and Secretary
Indianapolis, Indiana
June 9, 1997
17
<PAGE>
THE FINISH LINE, INC.
CLASS A COMMON STOCK
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS, JULY 17, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 17, 1997 AT 9:00 A.M.
NBD BANK, ONE INDIANA SQUARE, INDIANAPOLIS, INDIANA 46266, 5TH FLOOR AUDITORIUM
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Stockholders and the accompanying Proxy Statement for the 1997 Annual Meeting
and, revoking all prior Proxies, appoints Alan H. Cohen and Steven J. Schneider,
and each of them, with full power of substitution in each, the Proxies of the
undersigned to represent the undersigned and vote all shares of Class A Common
Stock of the undersigned in The Finish Line, Inc. at the Annual Meeting of
Stockholders to be held on July 17, 1997, and any adjournments or postponements
thereof upon the following matters and in the manner designated on the reverse
side of this proxy card.
(CONTINUED ON OTHER SIDE)
<PAGE>
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
THE FINISH LINE, INC.
July 17, 1997
Please Detach and Mail in the Envelope Provided
- --------------------------------------------------------------------------------
A [X] Please mark your
votes as in this
example
FOR all nominees WITHHOLD Nominees:
listed at right AUTHORITY Alan H. Cohen
(except as marked to vote for all David M. Fagin
to the contrary below) nominees listed David I. Klapper
Jonathan K. Layne
1. Election of [ ] [ ] Larry J. Sablosky
Directors. Jeffrey H. Smulyan
(INSTRUCTION: to withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
- -------------------------------------------
2. To transact such other business as may properly come before the meeting or
any adjournments or postponements thereof and as to which the undersigned
hereby confers discretionary authority.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION AS DIRECTORS OF THE NOMINEES NAMED IN THE PROXY
STATEMENT, AND ACCORDING TO THE JUDGMENT OF THE PROXIES WITH RESPECT TO PROPOSAL
2.
PLEASE MARK, SIGN, DATE AND MAIL THIS CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
SIGNATURES(S)_____________________________________________________
__________________________________________________________________
SIGNATURE (IF HELD JOINTLY)
DATED:__________________, 1997
Note: Please sign as name(s) appears. Executors, administrators, guardians,
officers of corporations, and others signing in a fiduciary capacity should
state their full title as such.
