<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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:
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(2) Aggregate number of securities to which transaction applies:
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(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:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF FINISH LINE(R)]
June 9, 1998
Dear Stockholder:
You are cordially invited to attend the 1998 Annual Meeting of Stockholders
of The Finish Line, Inc. on Thursday, July 16, 1998, 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 16, 1998
----------------
TO THE STOCKHOLDERS OF THE FINISH LINE, INC.:
Notice is hereby given that the 1998 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 16, 1998 at 9:00 a.m., will be
conducted for the following purposes:
1. To elect six directors;
2. To approve an amendment to the Company's 1992 Employee Stock Incentive
Plan to increase the number of shares subject thereto from 1,700,000 to
3,500,000 and to approve and ratify the Company's 1992 Employee Stock
Incentive Plan, as amended and restated; and
3. 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 May 29, 1998, 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, 1998
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 16, 1998
----------------
GENERAL INFORMATION
This Proxy Statement and the accompanying Notice of Annual Meeting and Proxy
Card are being mailed on or about June 9, 1998 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 1998 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 16, 1998, 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, to approve an
amendment to and ratify the Company's 1992 Employee Stock Incentive Plan and
to vote on such other matters as may properly come before the Annual Meeting.
Throughout this Proxy Statement, fiscal 1998, fiscal 1997 and fiscal 1996
represent the fiscal years ended February 28, 1998, March 1, 1997, and
February 29, 1996, 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 therefor. 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 May 29, 1998 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, 18,900,041 shares of Class
A Common Stock and 7,249,068 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, FOR the amendment to and ratification of the
Company's 1992 Employee Stock Incentive Plan 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 May 29, 1998, 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 MAY 29, 1998
--------------------------------------------------------
CLASS A CLASS B
----------------------- ----------------------
NUMBER OF % OF NUMBER OF % OF TOTAL
NAME SHARE (1)(2) CLASS(3) SHARES(1) CLASS(3) SHARES
- ---- ------------ -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
Alan H. Cohen........... 190,000(4) 1.0% 2,331,898(10) 32.2% 2,521,898
David I. Klapper........ 200,000(5) 1.0% 2,343,698(11) 32.3% 2,543,698
David M. Fagin.......... -- -- 711,823(12) 9.8% 711,823
Larry J. Sablosky....... 60,000(6) (9) 1,591,779(13) 22.0% 1,651,779
Joseph W. Wood.......... 44,350(7) (9) -- -- 44,350
Steven J. Schneider..... 26,350(7) (9) -- -- 26,350
Donald E. Courtney...... 36,950(7) (9) -- -- 36,950
George S. Sanders....... 22,950(7) (9) -- -- 22,950
Michael L. Marchetti.... 4,350(7) (9) -- -- 4,350
Gary D. Cohen........... 8,500(7) (9) -- -- 8,500
Thomas R. Sicari........ 800(7) (9) -- -- 800
Kevin S. Wampler........ 3,800(7) (9) -- -- 3,800
Kevin G. Flynn ......... 920(7) (9) -- -- 920
Robert A. Edwards ...... 11,700(7) (9) -- -- 11,700
James B. Davis ......... 1,050(7) (9) -- -- 1,050
Paul C. Wagner.......... 470(7) (9) -- -- 470
Jonathan K. Layne....... 4,000(7) (9) -- -- 4,000
Jeffrey H. Smulyan...... 28,000(7) (9) -- -- 28,000
FMR Corp................ 1,836,700(8) 9.7% -- -- 1,836,700
82 Devonshire Street
Boston, MA 02109
Invesco Funds Group,
Inc.................... 1,294,300(8) 6.9% -- -- 1,294,300
7800 E. Union Avenue
Denver, CO 80237
Wellington Management
Company, LLP........... 1,195,500(8) 6.3% -- -- 1,195,500
75 State Street
Boston, MA 02109
Mellon Bank ............ 1,179,300(8) 6.2% -- -- 1,179,300
One Mellon Bank Center
Pittsburgh, PA 15258
All directors and
executive officers as a
group (18 persons)..... 644,190 3.4% 6,979,198 96.3% 7,623,388
</TABLE>
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(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 A 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) 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 of
1934.
3
<PAGE>
(4) Includes 40,000 shares gifted to a private family foundation which is
controlled by the named person.
(5) Includes 50,000 shares gifted to a private family foundation which is
controlled by the named person.
(6) Represents shares gifted to a private family foundation which is
controlled by the named person.
(7) Includes the following shares issuable upon exercise of options which are
exercisable within 60 days of May 29, 1998:
<TABLE>
<S> <C>
Joseph W. Wood...................................................... 44,350
Steven J. Schneider................................................. 20,350
Donald E. Courtney.................................................. 35,350
George S. Sanders................................................... 22,950
Michael L. Marchetti................................................ 4,350
Gary D. Cohen....................................................... 2,000
Thomas R. Sicari.................................................... 800
Kevin S. Wampler.................................................... 3,800
Kevin G. Flynn...................................................... 720
Robert A. Edwards................................................... 11,000
James B. Davis...................................................... 1,050
Paul C. Wagner...................................................... 470
Jonathan K. Layne................................................... 4,000
Jeffrey H. Smulyan.................................................. 22,000
</TABLE>
(8) This information is based solely on Schedule 13G's filed with the
Securities Exchange Commission, copies of which were provided to the
Company. The respective dates of the Schedule 13G's are as follows:
<TABLE>
<S> <C>
FMR Corp.......................................................... 04/10/98
Investco Funds Group, Inc. ....................................... 02/09/98
Wellington Management Company, LLP................................ 01/13/98
Mellon Bank....................................................... 01/26/98
</TABLE>
(9) Less than 1% of the shares of Class A Common Stock outstanding.
(10) Includes 679,068 shares of Class B Common Stock held as trustee of
various trusts for the benefit of his minor children and 150,000 shares
of Class B Common Stock held by a family partnership in which Mr. Cohen
serves as general partner.
(11) Includes 675,800 shares of Class B Common Stock held as trustee of
various trusts for the benefit of his minor children and 359,526 shares
of Class B Common Stock held by a family partnership in which Mr. Klapper
serves as general partner.
(12) Includes 130,130 shares held by a family partnership of which Mr. Fagin
is a partner. Excludes an aggregate of 269,870 shares held by the same
family partnership which are deemed beneficially owned by Mr. Fagin's
sons and daughter (each of whom is over the age of 21) and by Mr. Fagin's
former spouse.
(13) Includes (i) 172,417 shares of Class B Common Stock held as trustee of a
trust for the benefit of his minor children, (ii) 275,773 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, (iii) 9,968
shares of Class B Common Stock held by Mr. Sablosky's spouse and (iv)
11,632 shares of Class B Common Stock held by Mr. Sablosky as custodian
for his minor children.
4
<PAGE>
ELECTION OF DIRECTORS
A Board of six directors is to be elected at the 1998 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 1998
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........... 51 Chairman of the Board, President and 1976
Chief Executive Officer
David I. Klapper........ 49 Executive Vice President, Director 1976
David M. Fagin.......... 54 Executive Vice President, Director 1982
Larry J. Sablosky....... 49 Executive Vice President, Director 1982
Joseph W. Wood.......... 51 Senior Vice President-Merchandise and Marketing 1995
Steven J. Schneider..... 42 Senior Vice President-Finance, Chief Financial 1989
Officer and Secretary
Donald E. Courtney...... 43 Senior Vice President-MIS and Distribution 1989
George S. Sanders....... 40 Senior Vice President-Real Estate and Store 1994
Development
Gary D. Cohen........... 46 Senior Vice President-General Counsel 1997
Michael L. Marchetti.... 47 Senior Vice President-Store Operations 1995
Thomas R. Sicari........ 44 Vice President-General Merchandise Manager 1997
Kevin S. Wampler........ 35 Vice President-Corporate Controller and Assistant 1997
Secretary
Kevin G. Flynn.......... 34 Vice President-Marketing 1997
Robert A. Edwards....... 36 Vice President-Distribution 1997
James B. Davis.......... 35 Vice President-Real Estate 1997
Paul C. Wagner.......... 32 Vice President-MIS 1997
Jonathan K. Layne....... 44 Director 1992
Jeffrey H. Smulyan...... 51 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. Cohen is the brother of Gary D. Cohen.
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
6
<PAGE>
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.
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 approximately 20 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 over 20 years.
Mr. George S. Sanders has served as Senior Vice President-Real Estate and
Store 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. Gary D. Cohen has served as Senior Vice President-General Counsel of the
Company since his employment in July 1997. From April 1990 to July 1997, Mr.
Cohen was a Senior Partner in the law firm of Cohen and Morelock. During the
15 years preceding his joining the Company, Mr. Cohen represented the Company
regarding real estate matters. From 1978 to 1990 Mr. Cohen held associate
partnership positions with various law firms. At the present time, Mr. Cohen
retains an "Of Counsel" position with Cohen and Morelock. Mr. Cohen is the
brother of Alan H. Cohen.
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 March 1995. Mr. Sicari
was employed from March 1991 to March 1994 as a footwear buyer for Champs
Sports (a division of Kinney Corp.) a specialty athletic mall based retailer.
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 May 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.
7
<PAGE>
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. James B. Davis has served as Vice President-Real Estate of the Company
since October 1997. Mr. Davis has been employed by the Company since October
1996 and prior to his election as an officer, held the position of Director of
Leasing. Mr. Davis was previously employed as Vice President-Leasing for JMB
Urban, (a real estate developer and manager) from January 1993 to October
1996.
Mr. Paul C. Wagner has served as Vice President-MIS of the Company since
October 1997. Mr. Wagner has been employed by the Company since August 1995.
Prior to his election as an officer, Mr. Wagner held the position of Director
of Information Systems for the Company. Mr. Wagner was employed by Sunsations
as Director of IS from April 1994 to August 1995. Mr. Wagner previously was
employed by the Cotton Board from January 1990 to April 1994 as Director of
Information Systems.
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.
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. Unless otherwise
stated, 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 4 meetings in fiscal 1998 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 three 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. The Finance
Committee is comprised of Messrs. Klapper and Layne. There is no committee
performing the function of a Nominating Committee.
The Audit Committee met two times during fiscal 1998. 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 five times during fiscal
1998. 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.
The Finance Committee met one time during fiscal 1998. The Finance Committee
focuses on overseeing the management by the officers of the Company of the
Company's investments and working capital.
8
<PAGE>
EXECUTIVE COMPENSATION
The following Summary Compensation Table shows compensation paid by the
Company for services rendered during fiscal years 1998, 1997 and 1996 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 $100,000 in fiscal 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
--------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------- ------------------------ -------
SECURITIES
RESTRICTED UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS STOCK OPTIONS/SAR'S PAYOUTS COMPENSATION
POSITION YEAR ($) ($)(1) AWARD(S) $ (#) ($) ($)(3)
------------------ ---- --------- --------- ---------- ------------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Alan H. Cohen............ 1998 265,500 136,184 -- -- -- --
CEO, President and 1997 265,000 159,000 -- -- -- --
Chairman of the Board 1996 265,000 116,706 -- -- -- --
Joseph W. Wood........... 1998 202,400 69,342 -- 17,000 -- 18,542
Sr. Vice President-- 1997 187,400 74,960 -- -- -- 18,390
Merchandise and 1996 172,632 80,685(2) -- 10,000 -- --
Marketing
Steven J. Schneider...... 1998 177,000 60,640 -- 17,000 -- 18,542
Sr. Vice President of 1997 160,000 64,000 -- -- -- 18,390
Finance, Chief 1996 145,200 42,631 -- 10,000 -- 17,879
Financial Officer
and Secretary
George S. Sanders........ 1998 150,000 51,390 -- 17,000 -- 18,542
Sr. Vice President, 1997 133,100 53,240 -- -- -- 18,390
Real Estate and 1996 121,000 35,526 -- 10,000 -- 16,041
Store Development
Donald E. Courtney....... 1998 145,000 49,677 -- 17,000 -- 18,542
Sr. Vice President, 1997 133,100 53,240 -- -- -- 18,390
MIS & Distribution 1996 121,000 35,526 -- 10,000 -- 16,980
</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 $2,500 per meeting for attending regular meetings
of the Board of Directors and are reimbursed for expenses incurred in
attending regular, special and committee meetings. In addition, Directors who
are not employees of the Company receive options to purchase 6,000 shares of
Class A Common Stock upon their first election to the Board and an additional
4,000 options for each year they serve on the Board.
9
<PAGE>
OPTIONS GRANTS IN LAST FISCAL YEAR
The following table contains information with respect to options to purchase
the Company's Class A Common Stock granted during fiscal 1998 to the Named
Officers.
<TABLE>
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE VALUE
--------------------------------------------- AT ASSUMED ANNUAL
NUMBER OF RATES OF STOCK
SECURITIES % OF PRICE
UNDERLYING TOTAL OPTIONS APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OPTION TERM(4)
GRANTED EMPLOYEES IN PRICE EXPIRATION ----------------- -------
NAME (#)(1)(2) FISCAL YEAR ($/SH)(3) DATE 5% 10%
- ---- ---------- ------------- --------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alan H. Cohen........... -- -- -- -- -- --
Joseph W. Wood.......... 17,000 2.5% 17.81 2/4/2008 $190,410 $482,537
George S. Sanders....... 17,000 2.5% 17.81 2/4/2008 $190,410 $482,537
Donald E. Courtney...... 17,000 2.5% 17.81 2/4/2008 $190,410 $482,537
Steven J. Schneider..... 17,000 2.5% 17.81 2/4/2008 $190,410 $482,537
</TABLE>
- --------
(1) Options granted during fiscal 1998 vest 10% after one year, an additional
20% after two years, an additional 30% after three years and the remaining
40% four years after the date of grant.
(2) Options were granted for a term of 10 years, subject to earlier
termination in certain events related to termination of employment.
(3) Options were granted at market value at the date of grant.
(4) Potential realizable value is based on the assumption that the common
stock price appreciates at the annual rate shown (compounded annually)
from the grant date until the end of the ten year option term. This value
is calculated based on requirements of the Securities and Exchange
Commission and does not reflect the Company's estimate of future stock
price growth.
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
Shown below is information with respect to unexercised options to purchase
the Company's Class A Common Stock under the Incentive Plan (as defined
herein).
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/SARS
OPTIONS/SARS AT FY-END
AT FY-END (#) ($)(1)
SHARES ACQUIRED VALUE ------------- -------------
ON EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
---- --------------- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alan H. Cohen............. -- -- -- -- -- --
Joseph W. Wood............ -- -- 44,350 54,650 43,500 47,000
Steven J. Schneider....... -- -- 30,352 26,650 29,502 19,000
George S. Sanders......... -- -- 22,950 26,650 22,100 19,000
Donald E. Courtney........ -- -- 40,350 26,650 39,500 19,000
</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 27, 1998
($16.375) 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 last three fiscal years,
Mr. Alan H. Cohen, the Company's Chief Executive Officer, was compensated at
an annualized rate of $265,000. See "Executive Compensation--Summary
Compensation Table". In March 1997, 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 February 28, 1998, was
based on four factors:
1. Increase in 1998 operating income before taxes as compared to 1997
operating income before taxes
2. Same store sales increases
3. Total sales increases
4. Total square footage added from retail stores
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 ($136,184 for fiscal 1998) equal to a
meaningful percentage (51.4% for fiscal 1998) 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 (190,000 shares of Class A Common Stock and 2,331,898
shares of Class B Common Stock as of May 29, 1998), 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. Mr. Cohen, along with Mr.
David I. Klapper, Mr. David M. Fagin and Mr. Larry J. Sablosky (collectively
"founders") are principal stockholders of the Company and have currently
elected not to receive grants of stock options or stock grants. Consequently,
no options or incentive awards were granted to the founders during fiscal
1998.
EXECUTIVE OFFICERS COMPENSATION
The Committee has adopted similar policies with respect to overall
compensation of the Company's other senior executive officers.
The Company's Senior Vice President-Merchandise and Marketing, Mr. Wood, was
compensated at an annual base salary of $202,400 during fiscal 1998. The
Company's Senior Vice President-Finance, Chief
11
<PAGE>
Financial Officer and Secretary, Mr. Schneider, was compensated at an annual
base salary of $177,000 during fiscal 1998. The Company's Senior Vice
President-Real Estate & Store Development, Mr. Sanders was compensated at an
annual base salary of $150,000 during fiscal 1998. The Company's Senior Vice
President-MIS and Distribution, Mr. Courtney was compensated at an annual base
salary of $145,000 during fiscal 1998. In addition, Messrs. Wood, Schneider,
Sanders and Courtney 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, 1997. 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.
SUMMARY
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 29, 1998
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.
12
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Smulyan and Layne comprise the Compensation and Stock Option
Committee.
Mr. Smulyan is Chairman of the Board, President and principal shareholder of
Emmis Broadcasting Corporation, a publicly held company. During fiscal 1998,
the Company purchased from Emmis Publishing Company, a wholly owned subsidiary
of Emmis Broadcasting Corporation, approximately $1,088,000 of publishing
services related to the Company's quarterly marketing magazine, "Spike."
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 FIVE-YEAR 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 S&P
(Fiscal Year Covered) FINISH LINE 500 INDEX Peer Group
- ------------------- ----------- --------- ----------
<S> <C> <C> <C>
Measurement Pt- 03/01/93 100.000 100.000 100.000
FYE 03/31/93 97.368 102.894 98.004
FYE 04/30/93 86.184 98.503 88.335
FYE 05/28/93 73.684 104.384 94.358
FYE 06/30/93 59.211 104.864 94.157
FYE 07/30/93 48.684 104.989 87.502
FYE 08/31/93 34.868 110.414 90.949
FYE 09/30/93 35.526 113.703 105.675
FYE 10/29/93 42.105 116.258 109.923
FYE 11/30/93 50.000 112.794 111.064
FYE 12/31/93 39.474 115.939 111.708
FYE 01/31/94 39.474 119.457 107.359
FYE 02/28/94 42.763 118.342 114.460
FYE 03/31/94 40.789 111.064 112.901
FYE 04/29/94 32.895 109.623 117.426
FYE 05/31/94 35.526 109.890 113.430
FYE 06/30/94 32.895 105.871 104.920
FYE 07/29/94 46.053 108.042 97.415
FYE 08/31/94 55.263 114.930 119.501
FYE 09/30/94 46.053 114.636 116.981
FYE 10/31/94 38.158 116.889 115.607
FYE 11/30/94 40.789 113.012 114.850
FYE 12/30/94 39.474 113.328 103.813
FYE 01/31/95 39.474 113.964 94.412
FYE 02/28/95 33.553 119.991 89.284
FYE 03/31/95 39.474 123.549 94.292
FYE 04/28/95 38.816 127.439 84.933
FYE 05/31/95 46.053 130.727 77.715
FYE 06/30/95 51.316 141.321 78.471
FYE 07/31/95 60.526 151.709 84.367
FYE 08/31/95 44.079 154.785 79.367
FYE 09/29/95 48.684 158.345 79.046
FYE 10/31/95 46.711 157.437 66.681
FYE 11/30/95 47.368 161.134 75.317
FYE 12/29/95 39.474 160.275 66.614
FYE 01/31/96 39.474 161.065 57.663
FYE 02/29/96 46.053 167.195 56.427
FYE 03/29/96 89.474 167.749 62.566
FYE 04/30/96 109.211 181.667 72.099
FYE 05/31/96 131.579 190.008 75.634
FYE 06/28/96 150.658 181.443 70.723
FYE 07/31/96 103.948 165.286 60.492
FYE 08/30/96 165.790 174.547 64.346
FYE 09/30/96 250.000 187.898 65.365
FYE 10/31/96 223.685 185.823 58.815
FYE 11/29/96 236.842 197.310 53.694
FYE 12/31/96 222.369 197.132 53.510
FYE 01/31/97 231.579 211.142 51.860
FYE 02/28/97 226.316 199.470 52.073
FYE 03/31/97 234.211 186.448 56.948
FYE 04/30/97 108.553 192.277 56.377
FYE 05/30/97 130.263 214.076 59.291
FYE 06/30/97 153.948 220.626 62.375
FYE 07/31/97 142.105 243.915 61.765
FYE 08/29/97 147.369 243.544 66.845
FYE 09/30/97 199.342 257.953 76.967
FYE 10/31/97 177.632 244.600 76.415
FYE 11/28/97 200.000 245.824 77.510
FYE 12/31/97 138.158 241.963 75.074
FYE 01/30/98 134.211 249.718 77.188
FYE 02/27/98 172.369 273.178 85.108
</TABLE>
ASSUMES $100 INVESTED ON MARCH 1, 1993
AND ASSUMES DIVIDENDS REINVESTED THROUGH
FISCAL YEAR ENDING FEBRUARY 28, 1998
- --------
(1) Peer group is: Standard Industrial Classification Codes 5940 through 5949
(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.
14
<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 May 29, 1998, 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 May
29, 1998, options to purchase an aggregate of 44,000 shares of Class A Common
Stock at an average exercise price of $7.70 per share had been granted under
the Director Plan to a total of two persons. Of these options, 18,000 have
been exercised at an average price of $6.42 per share. The unexercised options
total 26,000 shares and vest over the following years:
<TABLE>
<CAPTION>
# SHARES
--------
<S> <C>
Currently Vested................ 18,000
Vest During FYE 2/99............ 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 June 1, 1998, the last sale price of the Company's Class
A Common Stock on the NASDAQ National Market System was $24.00 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.
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
15
<PAGE>
maximum number of shares of Class A Common Stock issuable from 1,000,000 to
1,700,000. On April 30, 1998, the Board of Directors again amended the
Incentive Plan (subject to stockholder approval) to increase the maximum
number of shares of Class A Common Stock issuable from 1,700,000 to 3,500,000.
Any person who is employed by the Company or any subsidiary of the Company is
eligible to participate in the Incentive Plan. As of May 29, 1998
approximately 8,000 persons were eligible.
Prior to the second amendment noted above, 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 May 29, 1998, options to
purchase an aggregate of 1,766,905 shares of Class A Common Stock (with 66,905
of such options subject to stockholder approval of the second amendment to the
Incentive Plan) at an average exercise price of $9.20 per share had been
granted (net of cancellations) under the Incentive Plan to a total of 146
persons leaving no options available for future grant. Included in these
grants are options to purchase an aggregate of 446,000 shares granted to four
of the named executive officers at an average exercise price of $6.64. Of
these options, 188,400 have been exercised at an average price of $5.16 per
share. All unexercised options, including those granted to the executives
above, total 1,235,796 shares and vest over the following years:
<TABLE>
<CAPTION>
#
SHARES
-------
<S> <C>
Currently Vested................. 314,570
Vest During FYE 2/1999........... 142,387
Vest During FYE 2/2000........... 336,001
Vest During FYE 2/2001........... 182,288
Vest During FYE 2/2002........... 260,550
</TABLE>
The Incentive Plan provides that it shall be administered by the
Compensation and Stock Option Committee; provided, however, that in the event
the Compensation and Stock Option Committee is not comprised of two or more
Non-Employee Directors (as defined in Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended, or in any successor rule), then
the Compensation and Stock Option Committee shall only be authorized and
empowered to recommend to the Board of Directors all things necessary or
desirable in connection with the administration of this Plan, and all
recommendations of the Compensation and Stock Option Committee relating to
this Plan shall be subject to final approval by the Board. Subject to the
provisions of the Incentive Plan, the Compensation and Stock Option Committee
(so long as it is comprised of two or more Non-Employee Directors) or the full
Board of Directors (so long as the Compensation and Stock Option Committee is
not comprised of two or more Non-Employee Directors) has the 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
(so long as it is comprised of two or more Non-Employee Directors) or the full
Board of Directors (so long as the Compensation and Stock Option Committee is
not comprised of two or more Non-Employee Directors) 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 June 1, 1998, the last sale price of the Company's Class A Common Stock on
the NASDAQ National Market System was $24.00 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.
16
<PAGE>
APPROVAL OF AMENDED AND RESTATED
1992 EMPLOYEE STOCK INCENTIVE PLAN
As of April 30, 1998, no shares of Class A Common Stock remained available
under the Incentive Plan for the grant of stock options or stock appreciation
rights, for sale as restricted stock or for issuance pursuant to other stock-
based incentives. In order to increase the aggregate number of shares
available for stock-based incentives, on April 30, 1998 the Board amended and
restated the Incentive Plan and is submitting such amended and restated
Incentive Plan to stockholders for their approval at the Annual Meeting.
The following description of the Incentive Plan, as amended and restated, is
qualified in its entirety by reference to the full text of such Plan, a copy
of which is attached as Exhibit A to this Proxy Statement. Awards, if any, to
be made to any specific employees under the Incentive Plan are not yet
determinable.
The purpose of the Incentive Plan is to enable the Company and its
subsidiaries to attract, retain and motivate their employees by providing for
or increasing the proprietary interests of such employees in the Company.
Every employee of the Company or any of its subsidiaries is eligible to be
considered for the grant of awards under the Incentive Plan. The maximum
number of shares of Class A Common Stock that may be issued pursuant to awards
granted under the Incentive Plan is currently 1,700,000, subject to certain
adjustments to prevent dilution. It is proposed that the maximum number of
shares of Class A Common Stock that may be issued pursuant to awards under the
Incentive Plan be increased by 1,800,000 shares to an aggregate of
3,500,000 shares of Class A Common Stock, subject to certain adjustments to
prevent dilution.
The Incentive Plan will be administered by the Compensation and Stock Option
Committee; provided, however, that in the event the Compensation and Stock
Option Committee is not comprised of two or more Non-Employee Directors, then
the Compensation and Stock Option Committee shall only be authorized and
empowered to recommend to the Board of Directors all things necessary or
desirable in connection with the administration of this Plan, and all
recommendations of the Compensation and Stock Option Committee relating to
this Plan shall be subject to final approval by the Board. Subject to the
provisions of the Incentive Plan, the Compensation and Stock Option Committee
(so long as it is comprised of two or more Non-Employee Directors) or the full
Board of Directors (so long as the Compensation and Stock Option Committee is
not comprised of two or more Non-Employee Directors) will have authority to
select the participants to whom awards will be granted thereunder, to grant
such awards, and to determine the terms and conditions of such awards and the
number of shares to be issued pursuant thereto.
AWARDS
The Incentive Plan authorizes the Compensation and Stock Option Committee
(so long as it is comprised of two or more Non-Employee Directors) to enter
into any type of arrangement with an eligible employee that, by its terms,
involves or might involve the issuance of (1) Class A Common Stock, (2) an
option, warrant, convertible security, stock appreciation right or similar
right with an exercise or conversion privilege at a price related to the Class
A common Stock, or (3) any other security or benefit with a value derived from
the value of the Class A Common Stock. No one employee may be granted options
or other awards with respect to more than 100,000 shares of Class A Common
Stock in any one calendar year (except where such limit is not required under
certain tax provisions that restrict the Company's ability to obtain a
deduction for compensation attributable to awards under the Incentive Plan),
subject to certain anti-dilution adjustments. The anti-dilution provisions of
the Incentive Plan also have been amended to provide generally that no
adjustment shall be made under those provisions to the extent such adjustment
would cause Incentive Options issued or issuable under the Incentive Plan to
be treated as other than Incentive Options, or to the extent the Committee
determines that such adjustment would result in the disallowance of a federal
income tax deduction for compensation attributable to awards by causing such
compensation to be treated as other than "Performance-Based Compensation," as
defined in the Incentive Plan.
Awards under the Incentive Plan are not restricted to any specified form or
structure and may include arrangements such as sales, bonuses and other
transfers of stocks, restricted stock, stock options, reload stock options,
stock purchase warrants, other rights to acquire stock, securities convertible
into or redeemable for stock,
17
<PAGE>
stock appreciation rights, limited stock appreciation rights, phantom stock,
dividend equivalents, performance units or performance shares. An award may
consist of one such arrangement or two or more such arrangements in tandem or
in the alternative. The Incentive Plan does not specify a minimum exercise
price or other consideration that a recipient of an award must pay to obtain
the benefit of an award, and therefore the maximum compensation payable to
employees pursuant to the Incentive Plan (as determined for federal income tax
purposes), during the term of the Incentive Plan and awards that may be issued
thereunder, is equal to the number of shares of Class A Common Stock with
respect to which awards may be issued thereunder, multiplied by the value of
such shares on the date such compensation is measured. Any such exercise price
or other consideration will be determined by the Compensation and Stock Option
Committee and included in the terms of such award.
An award granted under the Incentive Plan to an employee may include a
provision conditioning or accelerating the receipt of benefits, either
automatically or in the discretion of the Compensation and Stock Option
Committee, upon the occurrence of specified events, such as a change of
control of the Company, an acquisition of a specified percentage of the voting
power of the Company or a dissolution, liquidation, merger, reclassification,
sale of substantially all of the property and assets of the Company or other
significant corporate transaction. Any stock option granted to an employee may
be a tax-benefited Incentive Option or a Nonqualified Option. See "Federal
Income Tax Treatment" below.
An award under the Incentive Plan may permit the recipient to pay all or
part of the purchase price of the Class A Shares or other property issuable
pursuant thereto, and/or to pay all or part of such recipient's tax
withholding obligations with respect to such issuance, by delivering
previously owned shares of Class A Common Stock of the Company or other
property or by reducing the amount of Class A Shares or other property
otherwise issuable pursuant to the award. If an option granted under the
Incentive Plan permitted the recipient to pay for the Class A Shares issuable
thereto with previously owned Class A Shares, the recipient would be able to
exercise the option in successive transactions, starting with a relatively
small number of shares and, by a series of exercises using shares acquired
from each such transaction to pay the purchase price of the shares acquired in
the following transaction, to exercise an option for a larger number of shares
with no more investment than the original share or shares delivered.
At the present time the Company's founders have requested not to be eligible
for the grant of stock options or other incentive awards under the Incentive
Plan.
PLAN DURATION
The Incentive Plan became effective on March 27, 1992 and the Incentive
Plan, as amended and restated, became effective upon its adoption by the Board
of Directors on April 30, 1998, but no shares of Class A Common Stock may be
issued or sold under the Incentive Plan, as amended and restated, until it has
been approved by the Company's stockholders. Awards may not be granted under
the Incentive Plan after March 27, 2002. Although any award that was duly
granted on or prior to such date may thereafter be exercised or settled in
accordance with its terms, no shares of Class A Common Stock may be issued
pursuant to any award after March 27, 2012.
AMENDMENTS
The Board of Directors may amend or terminate the Incentive Plan at any time
and in any manner, subject to the following:
(1) the recipient of any award may not be deprived of such award or any
of his or her rights thereunder or with respect thereto without his or her
consent as a result of any such amendment or termination; and
(2) if any national securities exchange upon which any of the Company's
securities are listed requires that any such amendment be approved by the
Company's stockholders, then such amendment will not be effective until it
has been approved by the Company's stockholders.
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SECTION 16(B) OF THE EXCHANGE ACT
The acquisition and disposition of shares of Class A Common Stock by
officers, directors and more than 10% stockholders of the Company ("Insiders")
pursuant to awards granted to them under the Incentive Plan may be subject to
the provision of Section 16(b) of the Securities Exchange Act of 1934 (the
"Exchange Act"), under which a purchase of shares of Class A Common Stock
within six months before or after a sale of Class A Common Stock could result
in recovery by the Company of all or a portion of any amount by which the sale
proceeds exceed the purchase price. Insiders are required to file reports of
changes in beneficial ownership under Section 16(a) of the Exchange Act upon
acquisition and disposition of shares. Rule 16b-3 provides an exemption from
Section 16(b) liability for certain transactions pursuant to employee benefit
plans.
FEDERAL INCOME TAX TREATMENT
The following is a brief description of the federal income tax treatment
which will generally apply to awards made under the Incentive Plan, based on
federal income tax laws in effect on the date hereof. The exact federal income
tax treatment of awards will depend on the specific nature of the award. Such
an award may, depending on the conditions applicable to the award, be taxable
as an option, as restricted or unrestricted stock, as a cash payment, or
otherwise. Because the following is only a brief summary of the general
federal income tax rules, recipients of awards should not rely thereon for
individual tax advice, as each taxpayer's situation and the consequences of
any particular transaction will vary depending upon the specific facts and
circumstances involved. Each taxpayer is advised to consult with his or her
own tax advisor for particular federal, as well as state and local, income and
any other tax advice.
Incentive Options. Pursuant to the Incentive Plan, employees may be granted
options which are intended to qualify as incentive stock options ("Incentive
Options") under the provisions of Section 422 of the Internal Revenue Code
(the "Code"). Generally, the optionee is not taxed and the Company is not
entitled to a deduction on the grant or the exercise of an Incentive Option.
However, if the optionee sells the shares acquired upon the exercise of an
Incentive Option ("ISO Shares") at any time within (a) one year after the date
of transfer of ISO Shares to the optionee pursuant to the exercise of such
Incentive Option or (b) two years after the date of grant of such Incentive
Option, then (1) the optionee will recognize capital gain equal to the excess,
if any, of the sales price over the fair market value of the ISO Shares on the
date of exercise, (2) the optionee will recognize ordinary income equal to the
excess, if any, of the lesser of the sales price or the fair market value of
the ISO Shares on the date of exercise, over the exercise price of such
Incentive Option, (3) the optionee will recognize capital loss equal to the
excess, if any, of the exercise price of such Incentive Option over the sales
price of the ISO Shares, and (4) the Company will generally be entitled to a
deduction equal to the amount of ordinary income recognized by the optionee.
If the optionee sells the ISO Shares at any time after the optionee has held
the ISO Shares for at least (i) one year after the date of transfer of the ISO
Shares to the optionee pursuant to the exercise of the Incentive Option and
(ii) two years after the date of grant of the Incentive Option, then the
optionee will recognize capital gain or loss equal to the difference between
the sales price and the exercise price of such Incentive Option, and the
Company will not be entitled to any deduction.
The amount by which the fair market value of the ISO Shares received upon
exercise of any Incentive Option exceeds the exercise price will be included
as a positive adjustment in the calculation of an optionee's "alternative
minimum taxable income" ("AMTI") in the year of exercise, and thus exercise of
an Incentive Option may give rise to liability for alternative minimum tax.
The "alternative minimum tax" imposed on individual taxpayers is generally
equal to the amount by which 28% (26% of AMTI below certain amounts) of the
individual's AMTI (reduced by certain exemption amounts) exceeds his or her
regular income tax liability for the year.
Nonqualified Options. The grant of an option or other similar right to
acquire stock which does not qualify for treatment as an Incentive Option (a
"Nonqualified Option") is generally not a taxable event for the optionee. Upon
exercise of the option, the optionee will generally recognize ordinary income
in an amount equal to the excess of the fair market value of the stock
acquired upon exercise (determined as of the date of the exercise)
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over the exercise price of such option, and the Company will be entitled to a
tax deduction equal to such amount. See "Special Rules for Awards Granted to
Insiders," below.
Special Rules for Awards Granted to Insiders. If an optionee is a director,
officer or shareholder subject to Section 16 of the Exchange Act (an
"Insider"), the determination of the amount and the timing of income
recognition in connection with an award under the Incentive Plan, and the
beginning of the holding period for any shares received, may be required to be
deferred until the expiration of any period during which the Insider would be
restricted from disposing of any stock received, unless the Insider makes a
proper election under Section 83(b) of the Code (an "83 (b) Election") within
30 days from the date of exercise. Insiders should consult their tax advisors
to determine the tax consequences to them of exercising options granted to
them pursuant to the Incentive Plan.
Restricted Stock. Awards under the Incentive Plan may also include stock
sales, stock bonuses or other grants of stock that include provisions for the
delayed vesting of the recipient's rights to the stock. Unless the recipient
makes an 83(b) Election as discussed above within 30 days after the grant of
the restricted shares, the recipient generally will not be taxed on the grant
of restricted shares until the restrictions on such shares expire or are
removed. When the restrictions expire or are removed, the recipient will
recognize ordinary income (and the Company will be entitled to deduction) in
an amount equal to the excess of the fair market value of the shares at that
time over the purchase price. However, if the recipient properly makes an
83(b) Election within 30 days of the grant of restricted shares he or she will
recognize ordinary income (and the Company will be entitled to a deduction)
equal to the excess of the fair market value of the shares on the date of
receipt (determined without regard to vesting restrictions) over the purchase
price. In the case of an Insider (as defined above), the timing of income
recognition (including the date used to compute the fair market value of
shares) with respect to restricted shares may be deferred as described in
"Special Rules for Awards Granted to Insiders" above, unless the Insider makes
a valid 83(b) Election.
Miscellaneous Tax Issues. Awards may be granted under the Incentive Plan
which do not fall clearly into the categories described above. The federal
income tax treatment of these awards will depend upon the specific terms of
such awards. The Company will make arrangements as necessary for withholding
applicable taxes with respect to ordinary income recognized by a participant
in connection with awards made under the Incentive Plan.
With certain exceptions, an individual may not deduct investment-related
interest to the extent such interest exceeds the individual's net investment
income for the year. Investment interest generally includes interest paid on
indebtedness incurred to purchase shares of Class A Common Stock. Interest
disallowed under this rule may be carried forward to and deducted in later
years, subject to the same limitations.
A holder's tax basis in Class A Common Stock acquired pursuant to the
Incentive Plan generally will equal the amount paid for the Class A Common
Stock plus any amount recognized as ordinary income with respect to such
stock. Other than ordinary income recognized with respect to the Class A
Common Stock and included in basis, any subsequent gain or loss upon the
disposition of such stock generally will be capital gain or loss (long-term,
mid-term or short-term, depending on the holding period).
Special rules will apply in cases where a recipient of an award pays the
exercise or purchase price of the award or applicable withholding tax
obligations under the Incentive Plan by delivering previously owned shares of
Class A Common Stock or by reducing the amount of shares otherwise issuable
pursuant to the award. The surrender or withholding of such shares will, in
certain circumstances, result in the recognition of income with respect to
such shares or a carryover basis in the shares acquired.
The terms of the agreements pursuant to which specific awards are made to
employees under the Incentive Plan may provide for accelerated vesting or
payment of an award in connection with a change in ownership or control of the
Company. In that event and depending upon the individual circumstances of the
recipient, certain amounts with respect to such awards may constitute "excess
parachute payments" under the "golden parachute" provision of the Code.
Pursuant to these provisions, a recipient will be subject to a 20% excise tax
on any "excess parachute payments" and the Company will be denied any
deduction with respect to such payment. Recipients of awards should consult
their tax advisors as to whether accelerated vesting of an award in connection
with a change of ownership or control of the Company would give rise to an
excess parachute payment.
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The Company generally obtains a deduction equal to the ordinary income
recognized by the recipient of an award. However, the Company's deduction for
such amounts (including amounts attributable to the ordinary income recognized
with respect to options or restricted stock) may be limited to $1,000,000 (per
person) annually.
BOARD RECOMMENDATION
The Board of Directors believes that it is in the best interests of the
Company and its stockholders to adopt the Incentive Plan, as amended and
restated, in the form attached as Exhibit A in order to attract, retain and
motivate qualified employees. A majority of the votes cast at the Annual
Meeting is necessary for the approval of this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
APPROVAL OF THE AMENDED AND RESTATED 1992 EMPLOYEE STOCK INCENTIVE PLAN.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP was the Company's certified public accountant for fiscal
1998. During fiscal 1998, 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 1998 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 1999 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, 1999.
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MISCELLANEOUS
The Company's Annual Report to Stockholders for the fiscal year ended
February 28, 1998, 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 1998
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, 1998
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EXHIBIT A
THE FINISH LINE, INC.
1992 EMPLOYEE STOCK INCENTIVE PLAN
AS AMENDED AND RESTATED APRIL 30, 1998
SECTION 1. PURPOSE OF PLAN
The purpose of this Amended and Restated 1992 Employee Stock Incentive Plan
(the "Plan") of The Finish Line, Inc., a Delaware corporation (the "Company"),
is to enable the Company and its subsidiaries to attract, retain and motivate
their employees by providing for or increasing the proprietary interests of
such employees in the Company.
SECTION 2. PERSONS ELIGIBLE UNDER PLAN
Any person employed by the Company or any of its subsidiaries including any
director who is so employed (an "Employee"), shall be eligible to be
considered for the grant of Awards (as hereinafter defined) hereunder.
SECTION 3. AWARDS
(a) The Committee (as hereinafter defined and so long as it is comprised of
two or more Non-Employee Directors (as defined in Rule 16b-3 promulgated under
the Securities Exchange Act of 1934, as amended, or in any successor rule)),
on behalf of the Company, is authorized under this Plan to enter into any type
of arrangement with an Employee that is consistent with the provisions of the
Plan and that, by its terms involves or might involve the issuance of (i)
shares of Class A Common Stock, par value $.0l per share, of the Company
("Class A Shares") or (ii) a Derivative Security (as such term is defined in
Rule 16a-l promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as such Rule may be amended from time to time with an
exercise or conversion privilege at a price related to the Class A Shares or
with a value derived from the value of the Class A Shares. The entering into
of any such arrangement is referred to herein as the "grant" of an "Award."
(b) Awards are not restricted to any specified form or structure and may
include, without limitation, sales or bonuses of stock, restricted stock,
stock options, reload stock options, stock purchase warrants, other rights to
acquire stock, securities convertible into or redeemable for stock, stock
appreciation rights, limited stock appreciation rights, phantom stock,
dividend equivalents, performance units or performance shares, and an Award
may consist of one such security or benefit, or two or more or them in tandem
or in the alternative.
(c) Class A Shares may be issued pursuant to an Award for any lawful
consideration as determined by the Committee, including, without limitation,
services rendered by the recipient of such Award.
(d) Subject to the provisions of this Plan, the Committee (so long as it is
comprised of two or more Non-Employee Directors) or the full Board of
Directors (so long as the Committee is not comprised of two or more Non-
Employee Directors), in its sole and absolute discretion, shall determine all
of the terms and conditions of each Award granted under this Plan, which terms
and conditions may include, among other things:
(i) a provision permitting the recipient of such Award, including any
recipient who is a director or officer of the Company, to pay the purchase
price of the Class A Shares or other property issuable pursuant to such
Award, or such recipient's tax withholding obligation with respect to such
issuance, in whole or in part, by any one or more of the following:
(A) the delivery of previously owned Class A Shares of the Company
(including or other property,
(B) a reduction in the amount of Class A Shares or other property
otherwise issuable pursuant to such award, or
(C) the delivery of a promissory note, the terms and conditions of
which shall be determined by the Committee;
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(ii) a provision conditioning or accelerating the receipt of benefits
pursuant to such Award, either automatically or in the discretion of the
Committee, upon the occurrence of specified events, including, without
limitation, a change of control of the Company, an acquisition of a
specified percentage of the voting power of the Company, the dissolution or
liquidation of the Company, a sale of substantially all of the property and
assets of the Company or an event of the type described in Section 7
hereof; or
(iii) a provision required in order for such Award to qualify as an
incentive stock option under Section 422 of the Internal Revenue Code (an
"Incentive Stock Option")
(e) Notwithstanding any other provision of the Plan, no one Employee shall
be granted options or other Awards with respect to more than 100,000 Class A
Shares in any one calendar year; provided, however, that this limitation shall
not apply if it is not required in order for the compensation attributable to
Awards hereunder to qualify as performance-based compensation described in
Section 162(m) of the Internal Revenue Code ("Performance-Based
Compensation"). The limitation set forth in this Section 3(e) shall be subject
to adjustment as provided in Section 7 hereof, but only to the extent such
adjustment would not affect the status of compensation attributable to Awards
hereunder as Performance-Based Compensation
SECTION 4. STOCK SUBJECT TO PLAN
(a) The aggregate number of Class A Shares that may be issued pursuant to
all Incentive Stock Options granted under the Plan shall not exceed 3,500,000,
subject to adjustment as provided in Section 7 hereof.
(b) At any time, the aggregate number of Class A Shares issued and issuable
pursuant to all Awards (including all Incentive Stock Options) granted under
the Plan shall not exceed 3,500,000, subject to adjustment as provided in
Section 7 hereof.
(c) For purposes of Section 4(b) hereof, the aggregate number of Class A
Shares issued and issuable pursuant to Awards granted under this Plan shall at
any time be deemed to be equal to the maximum number of Class A Shares which
are or may be issuable at or after such time pursuant to Awards granted under
this Plan prior to such time.
SECTION 5. DURATION OF PLAN
No Awards shall be granted under this Plan after March 27, 2002. Although
Class A Shares may be issued after March 27, 2002 pursuant to Awards granted
prior to such date, no Class A Shares shall be issued under this Plan after
March 27, 2012.
SECTION 6. ADMINISTRATION OF PLAN
(a) This Plan shall be administered by a committee (the "Committee") of the
Board of Directors of the Company (the "Board") consisting of two or more
directors; provided, however, that in the event the Committee is not comprised
of two or more Non-Employee Directors, then the Committee shall only be
authorized and empowered to recommend to the Board all things necessary or
desirable in connection with the administration of this Plan, including,
without limitation, the things listed in this Section 6, and all
recommendations of the Committee relating to this Plan shall be subject to
final approval by the Board.
(b) Subject to the provisions of this Plan, the Committee (so long as it is
comprised of two or more Non-Employee Directors) or the Board (so long as the
Committee is not comprised of two or more Non-Employee Directors) shall be
authorized and empowered to do all things necessary or desirable in connection
with the administration of this Plan, including, without limitation, the
following:
(i) adopt, amend and rescind rules and regulations relating to this Plan;
(ii) determine which persons meet the requirements of Section 2 hereof
for eligibility under this Plan and to which of such eligible persons, if
any, Awards shall be granted hereunder;
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(iii) grant Awards to eligible persons and determine the terms and
conditions thereof, including the number of Class A Shares issuable
pursuant thereto;
(iv) determine whether, and the extent to which adjustments are required
pursuant to Section 7 hereof; and
(v) interpret and construe this Plan and the terms and conditions of any
Award granted hereunder.
SECTION 7. ADJUSTMENTS
If the outstanding securities of the class then subject to this Plan are
increased, decreased or exchanged for or converted into cash, property or a
different number or kind or securities, or if cash, property or securities are
distributed in respect of such outstanding securities, in either case as a
result of a reorganization, merger, consolidation, recapitalization,
restructuring, reclassification, dividend (other than a regular, quarterly
cash dividend) or other distribution, stock split, reverse stock split or the
like, or if substantially all of the property and assets of the Company are
sold, then, unless the terms of such transaction shall provide otherwise, the
Committee (so long as it is comprised of two or more Non-Employee Directors)
or the Board (so long as the Committee is not comprised of two or more Non-
Employee Directors) shall make appropriate and proportionate adjustments in
(a) the number and type of shares or other securities or cash or other
property that may be acquired pursuant to Incentive Stock Options and other
Awards theretofore granted under this Plan, (b) the maximum number and type of
shares or other securities that may be issued pursuant to Incentive Stock
Options and other Awards thereafter granted under the Plan and (c) to the
extent permitted under Section 3(e) hereof, the maximum number of Class A
Shares with respect to which Awards may be granted to any Employee during any
calendar year; provided, however, that no adjustment shall be made to the
number of Class A Shares that may be acquired pursuant to outstanding
Incentive Stock Options or the maximum number of Class A Shares with respect
to which Incentive Stock Options may be granted under this Plan to the extent
such adjustment would result in such options being treated as other than
Incentive Stock Options; provided further that no such adjustment shall be
made to the extent the Committee or the Board, as the case may be, determines
that such adjustment would result in the disallowance of a federal income tax
deduction for compensation attributable to Awards hereunder by causing such
compensation to be other than Performance-Based Compensation.
SECTION 8. AMENDMENT AND TERMINATION OF PLAN
The Board may amend or terminate this Plan at any time and in any manner;
provided, however, that no such amendment or termination shall deprive the
recipient of an Award theretofore granted under this Plan, without the consent
of such recipient, of any of his or her rights or with respect thereto.
SECTION 9. EFFECTIVE DATE OF PLAN
The 1992 Employee Stock Incentive Plan became effective on March 27, 1992.
The amendments to the 1992 Employee Stock Incentive Plan reflected in this
Amended and Restated 1992 Employee Stock Incentive Plan shall be effective as
of April 30, 1998, the date upon which it was approved by the Board; provided,
however, that no Class A Shares may be issued under this Amended and Restated
1992 Employee Stock Incentive Plan until it has been approved, directly or
indirectly, by (a) the affirmative votes of the holders of a majority of the
securities of the Company present, or represented, and entitled to vote at a
meeting duly held in accordance with the laws of the State of Delaware or (b)
the written consent of the holders of a majority of the securities of the
Company entitled to vote.
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Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
THE FINISH LINE, INC.
July 16, 1998
Please Detach and Mail in the Envelope Provided
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A [X] Please mark your
votes as in this
example.
FOR all
nominees
listed at WITHHOLD
right (except AUTHORITY
as marked to vote
to the for all
contrary nominees
below) listed
1. Election of [_] [_] Nominees: Alan H. Cohen
Directors. David M. Fagin
David I. Klapper
(INSTRUCTION: to withhold authority to vote Jonathan K. Layne
for any individual nominee, write that Larry J. Sablosky
nominee's name on the space provided below.) Jeffrey H. Smulyan
- -------------------------------------------
FOR AGAINST ABSTAIN
2. To approve an amendment to the Company's 1992 [_] [_] [_]
Employee Stock Incentive Plan to increase the number of shares subject
thereto from 1,700,000 to 3,500,000 and to approve and ratify the Company's
1992 Employee Stock Incentive Plan, as amended and restated.
3. 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, FOR THE APPROVAL AND RATIFICATION OF AN AMENDMENT TO AND, RESTATEMENT
OF THE 1992 EMPLOYEE STOCK INCENTIVE PLAN, AND ACCORDING TO THE JUDGMENT OF THE
PROXIES WITH RESPECT TO PROPOSAL 3.
PLEASE MARK, SIGN, DATE AND MAIL THIS CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
SIGNATURE(S) Dated: , 1998
-------------------- --------------------- ----------
SIGNATURE (IF HELD JOINTLY)
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.
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THE FINISH LINE, INC.
CLASS A COMMON STOCK
Proxy for Annual Meeting of Stockholders, July 16, 1998
This Proxy is solicited on behalf of the board of directors for the
Annual Meeting of Stockholders to be held on July 16, 1998 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 1998 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 16, 1998, 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)
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