<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
JUMBOSPORTS 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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
---------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
---------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------------
(3) Filing Party:
---------------------------------------------------------------------
(4) Date Filed:
---------------------------------------------------------------------
<PAGE> 2
JUMBOSPORTS INC.
4701 W. HILLSBOROUGH AVENUE
TAMPA, FL 33614
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 4, 1997
Notice is hereby given that the Annual Meeting of the Stockholders of
JUMBOSPORTS INC. (the "Company") will be held at the Hyatt Regency Westshore,
6200 Courtney Campbell Causeway, Tampa, Florida 33607 on Wednesday, June 4, 1997
at 10:00 a.m. Eastern Daylight Time, for the following purposes:
1. To elect six directors to serve until the next Annual Meeting of
Stockholders and until their successors are duly elected and qualified.
2. To approve an amendment to the Company's Articles of Incorporation
to Classify the Board of Directors.
3. To approve an amendment to the Company's 1989 Incentive Stock Plan.
4. To ratify the Company's V.P. Stock Purchase Program.
5. To transact such other business as may properly come before the
meeting.
Only stockholders of record at the close of business on April 18, 1997 are
entitled to notice of and to vote at said meeting or at any adjournments
thereof.
By Order of the Board of Directors,
Stephen Bebis, Chairman of the Board,
President and Chief Executive Officer
April 24, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING OF STOCKHOLDERS, YOU ARE
URGED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. IF YOU DO ATTEND THE MEETING AND DECIDE THAT YOU
WISH TO VOTE IN PERSON, YOU MAY WITHDRAW YOUR PROXY.
<PAGE> 3
JUMBOSPORTS INC.
4701 W. HILLSBOROUGH AVENUE
TAMPA, FL 33614
PROXY STATEMENT
SOLICITATION
This proxy statement is furnished by and on behalf of the Board of
Directors of JUMBOSPORTS INC., a Florida corporation (the "Company"), in
connection with the solicitation of proxies for use at the Annual Meeting of
Stockholders, to be held on Wednesday, June 4, 1997 at the Hyatt Regency
Westshore, 6200 Courtney Campbell Causeway, Tampa, Florida 33607 at 10:00 a.m.
Eastern Daylight Time, and at any adjournment thereof (the "Annual Meeting"). At
the Annual Meeting, the presence in person or by proxy of the holders of a
majority of the total number of shares of Common Stock outstanding as of the
record date will constitute a quorum. Abstentions and broker non-votes will be
considered as present for purposes of determining a quorum. This Proxy Statement
and the accompanying proxy card, together with the Company's Annual Report for
the fiscal year ended January 31, 1997, are first being sent or given to
stockholders on or about May 1, 1997.
VOTING OF PROXIES
All shares represented by properly executed proxies will be voted in
accordance with the instructions indicated thereon unless such proxies are
revoked prior to such vote. If any proxies of holders of Common Stock do not
contain voting instructions, the shares represented by such proxies will be
voted FOR the Director nominees named in Proposal 1 and FOR each of Proposals 2,
3 and 4. The Board of Directors does not know of any business to be brought
before the Annual Meeting other than as indicated in the notice, but it is
intended that, as to any other such business, votes may be cast pursuant to the
proxies in accordance with the judgment of the persons acting thereunder.
Abstentions and broker non-votes will not be included in vote totals and will
not be considered in determining the outcome of the vote.
Any stockholder who executes and delivers a proxy may revoke it at any time
prior to its use upon (a) receipt by the Secretary of the Company of written
notice of such revocation; (b) receipt by the Secretary of the Company of a duly
executed proxy bearing a later date; or (c) appearance by the stockholder at the
Annual Meeting and his request for the return of his proxy made to the inspector
of elections prior to the taking of any vote.
Only stockholders of record at the close of business on April 18, 1997 are
entitled to notice of, and to vote at, the Annual Meeting. As of March 7, 1997,
there were 20,339,409 shares of Common Stock outstanding, each of which is
entitled to one vote.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Stockholders should be advised that members of management may benefit from
the staggered terms for directors proposed under Proposal No. 2, and, due to
their eligibility to participate in the 1989 Stock Incentive Plan and receive
grants thereunder, as well as the V.P. Stock Purchase Program, have a direct
interest in the Amendment to the 1989 Stock Incentive Plan proposed under
Proposal No. 3 and the ratification of the V.P. Stock Purchase Program set forth
as Proposal No. 4. Please refer to the disclosure on pages 17-19 with respect to
Proposal No. 2, pages 21-23 with respect to Proposal No. 3, and pages 24-25 with
respect to Proposal No. 4.
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
To the best knowledge of the Company based on information filed with the
Securities and Exchange Commission and information provided directly to the
Company by the persons and entities named below, the following table sets forth
the beneficial ownership of the Company's Common Stock, as of March 7, 1997
(unless otherwise noted), by each holder of more than 5% of the Company's Common
Stock and by each Director and executive officer of the Company and by the
Directors and executive officers as a group.
<TABLE>
<CAPTION>
SHARES
NAME AND ADDRESS OF POSITION WITH BENEFICIALLY PERCENT
BENEFICIAL OWNER COMPANY OWNED(1) OF CLASS
------------------- ------------- ------------ --------
<S> <C> <C> <C>
DIRECTORS/NOMINEES:
Stephen Bebis Chairman of the Board, 100,000(2) *
4701 W. Hillsborough Avenue Chief Executive Officer
Tampa, Florida and President
Harold Compton Director 10,000 *
14951 North Dallas Parkway
Dallas, Texas 74240
Samuel Northrop, Jr. Director 1,000 *
8140 Mar del Plata
Jacksonville, Florida 32256
Steven A. Raymund (3) Director 25,567 *
5350 Tech Data Drive
Clearwater, Florida
Ronald L. Vaughn Director -0- *
University of Tampa
401 W. Kennedy Blvd.
Tampa, Florida
Jack E. Bush Director -0- *
6222 Raintree Court
Dallas, Texas 75240
DIRECTOR NOT STANDING FOR
REELECTION:
Chris T. Sullivan (4) Director 6,833 *
550 N. Reo Street, Suite 204
Tampa, Florida
FORMER CHIEF EXECUTIVE OFFICER
Jim W. Bradke (5) -- -0- -0-
P.O. Box 412
Odessa, Florida
OTHER EXECUTIVE OFFICERS:
Raymond P. Springer Executive Vice President 32,000 *
4701 W. Hillsborough Avenue and Chief Financial Officer
Tampa, Florida
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
SHARES
NAME AND ADDRESS OF POSITION WITH BENEFICIALLY PERCENT
BENEFICIAL OWNER COMPANY OWNED(1) OF CLASS
- ------------------- ------------- ------------ --------
<S> <C> <C> <C>
Robert J. Wittman Executive Vice President 31,000 *
4701 W. Hillsborough Avenue Chief Merchandising Officer
Tampa, Florida
BENEFICIAL OWNERS IN
EXCESS OF 5% OWNERSHIP:
Investcorp S.A. (6) -- 2,793,914 13.74%
37 rue Notre-Dame
Luxembourg
Peter A. Wright (7) -- 1,267,600 6.23%
P.A.W. Capital Corp.
10 Glenville Street
Greenwich, CT 06831-3638
Wellington Management -- 1,121,302 5.51%
Company, LLP (8)
75 State Street
Boston, Massachusetts 02109
Dimensional Fund Advisors, Inc. -- 1,058,000 5.20%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401 (9)
All current Directors and executive -- 206,400 1.01%
officers as a group (9 persons)
</TABLE>
- ---------------
* Represents less than one percent
(1) As used in this table, beneficial ownership means the sole or shared power
to vote, or direct the voting of, a security, or the sole or shared power
to dispose, or direct the disposition of a security. The named stockholders
have sole power to vote and dispose of all shares shown as being
beneficially owned by them, except as otherwise indicated.
(2) Includes 50,000 shares of restricted stock issued to Mr. Bebis under the
terms of his employment agreement, subject to vesting over three years from
the date of his employment with the Company.
(3) Consists of 17,500 shares issuable upon exercise of options which are
presently exercisable, and 8,067 shares owned by the Steven A. Raymund
Family Trust, of which Mr. Raymund is the trustee and a beneficiary.
(4) Consists solely of shares issuable upon exercise of options which are
presently exercisable.
(5) Mr. Bradke resigned his positions as Chairman of the Board and Chief
Executive Officer of the Company, effective February 9, 1996, and his
position as Director on March 28, 1996. As of December 2, 1996, Mr. Bradke
exercised all outstanding options and sold the underlying shares. Currently
Mr. Bradke owns no shares of the Company's Common Stock.
(6) As of December 31, 1996. Investcorp does not hold any shares of the Company
directly. Share ownership listed above includes shares held by Investcorp's
indirect wholly-owned subsidiaries, as to which shares Investcorp holds
sole voting and investment power. Share ownership also includes 2,231,667
shares held by various Cayman Islands corporations, none of which and none
of the beneficial owners of which own individually more than 5% of the
Company's shares but as to which Investcorp may be deemed to share
3
<PAGE> 6
beneficial ownership as a result of certain revocable management contracts
between Investcorp and the beneficial owners of such shares pursuant to
which Investcorp has the authority to direct the voting and disposition of
the shares. Investcorp owns no stock in the Cayman Islands corporations
that hold the shares subject to such revocable management contracts.
(7) As of March 26, 1997. Includes 1,244,000 shares beneficially owned by
P.A.W., Capital Corp. ("P.A.W."), an investment advisor, of which Mr.
Wright is deemed to have beneficial ownership by virtue of his position as
President and majority shareholder of P.A.W.
(8) As of January 24, 1997. These shares are owned by a variety of investment
advisory clients of Wellington Management Company, which clients receive
dividends and the proceeds from the sale of such shares. No such client is
known to hold ownership of more than 5% of the class of shares reported.
(9) As of February 5, 1997. Dimensional Fund Advisors, Inc. ("Dimensional"), a
registered investment advisor, is deemed to have beneficial ownership of
1,058,000 shares, all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc., a registered open-end investment company,
or in series of The DFA Investment Trust Company, a Delaware business
trust, or the DFA Group Trust and the DFA Participating Group Trust,
investment vehicles for qualified employee benefit plans, all of which
Dimensional serves as investment manager. Dimensional disclaims beneficial
ownership of all such shares.
4
<PAGE> 7
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
The number of Directors has been fixed by the Board of Directors, pursuant
to the Company's Bylaws, at six, beginning June 4, 1997. The Board of Directors
proposes the election of six Directors, each to hold office until the next
Annual Meeting of the Stockholders, or if Proposal No. 2 is approved by vote of
the shareholders, until the annual meeting at which members of such Director's
class are next up for re-election, or until a successor has been elected and
qualified. Unless otherwise instructed by the stockholder, the persons named in
the accompanying proxy intend to vote for the election of the persons listed
below, all of whom are currently Directors of the Company. If any nominee
becomes unavailable for any reason or should a vacancy occur before the election
(which events are not anticipated), the proxies will be voted for the election
of a substitute nominee to be selected by the persons named in the proxy.
CERTAIN INFORMATION REGARDING DIRECTOR NOMINEES
<TABLE>
<CAPTION>
NAME AGE OCCUPATION/BACKGROUND
- ---- --- ---------------------
<S> <C> <C>
Stephen Bebis............................. 44 Chairman of the Board and Chief Executive of the Company
since February 1996. Mr. Bebis assumed the duties of
President in March of 1996. Mr. Bebis previously served as
President of Aikenhead's Home Improvement Warehouse in
Canada, a Canadian home improvement warehouse chain
headquartered in Toronto, which he started at the request
of and as a subsidiary of Canada's Molson Companies
Limited in 1991, and the controlling interest of which was
acquired by The Home Depot Inc. in 1994. Mr. Bebis
remained in that position until December 1995. Prior to
that, Mr. Bebis had been with The Home Depot Inc. in the
United States in various capacities, with his last
position at Home Depot being that of vice president of the
company's mid-south division.
Harold Compton............................ 49 Director of the Company since December 1996. Mr. Compton is
President and Chief Operating Officer of CompUSA stores, a
position he attained in July 1996, and Executive Vice
President and Chief Operating Officer of CompUSA Inc., a
position he has held since January 1995. He originally
joined CompUSA in 1994 as Executive Vice President --
Operations, and prior to joining the Company he served as
President and Chief Operating Officer of Central Electric,
Inc. (1993-1994). Previously, he served as Executive Vice
President -- Operations and Human Resources and Director
of Stores for Home Base (1989-1993), Senior Vice President
Operations and Director of Stores for Roses Discount
Department Stores (1986-1989), and in various management
positions for Zayre Corporation (1965-1986).
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
NAME AGE OCCUPATION/BACKGROUND
- ---- --- ---------------------
<S> <C> <C>
Samuel Northrop, Jr....................... 65 Director of the Company since August 1996. Mr. Northrop
retired in July 1996 as Director of Commercial Banking of
Barnett Banks, Inc. ("Barnett"), a position he held since
1991. He originally joined Barrett in November 1986 as
Senior Vice-President and Manager of the U.S. Banking
Group. At Barnett he was also a member of the Corporate
Loan Committee and of the Management Advisory Council.
Previously, he served in various management positions at
Wachovia Bank N.A., retiring in 1986 as group Vice-
President, Southeast Corporate Banking Group.
Steven A. Raymund......................... 41 Director of the Company since March 1993. Mr. Raymund is
also President and Chief Executive Officer of Tech Data
Corporation, which positions he has held since 1986, and
Chairman of the Board of Tech Data Corporation, which
position he has held since 1991. From 1981 until 1986, Mr.
Raymund was Operations Manager of Tech Data Corporation, a
leading distributor of personal computers. He is also a
director of Jabil Circuit, Inc.
Ronald L. Vaughn.......................... 50 Director of the Company since December 1996. Mr. Vaughn is
President of the University of Tampa, a position he has
held since January 1995. Previously, Mr. Vaughn served as
Dean of the College of Business and Dean of Graduate
Studies. Mr. Vaughn originally joined the University of
Tampa in August 1984 as a professor and from June 1989
served as Dean, College of Business, and Dean, Graduate
Studies, until his appointment as President of the
University.
Jack E. Bush.............................. 62 Mr. Bush has served as the President of Raintree Partners,
Inc., a management consulting firm since September 1995. He
is also Chairman of Carolina Art & Frame Company, Chief
Concept Officer of Aaron Brothers Holding Company, Inc.
and Artistree Art Frame and Design Company. Prior to his
current positions, he retired as President and Director of
Michaels Stores, Inc. and Chairman of Michaels of Canada
(1991-1995), and served as Executive Vice President,
Director of Operations and Stores for Ames Department
Stores, Inc. (1990-1991). From 1985 to 1990 Mr. Bush was
with Roses Discount Department Stores, last serving as
President and Director. Previously, he served in various
management capacities at Zayre Corporation (1980-1985) and
J.C. Penney Company (1958-1980). Mr. Bush is also a
Director of New World Coffee Company and serves on the
Strategic Planning Board of Directors of the College of
Business and Public Administration at the University of
Missouri, from which he is a graduate.
</TABLE>
6
<PAGE> 9
The election of Directors will require the affirmative vote of a plurality
of shares voting in person or by proxy at the Annual Meeting. THE BOARD
RECOMMENDS THE STOCKHOLDERS VOTE "FOR" THE ELECTION OF THE ABOVE LISTED NOMINEES
AS DIRECTORS.
---------------------
ADDITIONAL INFORMATION CONCERNING DIRECTORS
DIRECTORS' FEES
Directors who are employees of the Company receive no compensation for
their services as a Director. Directors who are not officers of the Company each
receive, upon their first appointment to the Board, a one-time option grant to
purchase 10,000 shares of the Company's Common Stock at the fair market value of
the Common Stock on the date of grant and, for so long as the Director remains a
member of the Board, annual compensation in the form of option grants to
purchase 1,000 shares of the Company's Common Stock at the fair market value of
the Common Stock on the day preceding each Annual Meeting of Stockholders. These
options vest and become exercisable on the first anniversary of the date of
grant, provided the Director then remains a member of the Board. In addition,
each of said Directors is paid an annual fee of $16,000 and $1,500 for
attendance, in person or by telephone, at each Board meeting. No separate
compensation is payable for participation in committee meetings. Directors are
entitled to reimbursement for expenses incurred in attending Board and committee
meetings, including travel, food and lodging.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
The Board met, in person or by teleconference, eight times during the last
fiscal year. Each incumbent Director attended at least 75% of the Board meetings
and Committee meetings of which they were a member.
The Company has standing Audit, Compensation and Executive Committees. The
Company does not have a standing Nominating Committee. The Audit and
Compensation Committees are each comprised of three members who are not
employees of the Company. The Executive Committee was formed in March 1996 and
is currently comprised of Stephen Bebis, Steven A. Raymund and Chris T.
Sullivan.
The Audit Committee met once during the last fiscal year. The Audit
Committee currently consists of Sam Northrop, Ronald Vaughn and Steven A.
Raymund. The Audit Committee makes recommendations to the full Board of
Directors concerning engagement of the independent public accountants, reviews
the scope of the audit, reviews the financial statements and the report of the
independent public accountants, and reviews the scope and results of the
Company's internal auditing activities.
The Compensation Committee met once during the last fiscal year. The
Compensation Committee currently consists of Chris T. Sullivan and Harold
Compton. The Compensation Committee reviews and approves executive compensation
and administers and makes recommendations concerning all of the Company's
compensation-related plans.
The Executive Committee has and exercises all the powers and authority of
the Board of Directors in the management of the business and affairs of the
Company. This committee met once during the last fiscal year.
7
<PAGE> 10
MANAGEMENT CHANGES
In February 1996 Mr. Bradke resigned as Chairman of the Board and Chief
Executive Officer of the Company. At approximately the same time, Mr. Bebis was
elected to the Board of Directors by the Directors and was appointed Chairman of
the Board and Chief Executive Officer of the Company. He assumed the title of
President of the Company in March 1996. In March of 1996, Mr. Richard Welch,
Vice President of Finance for the Company, left the employ of the Company and,
in connection therewith, resigned as a Director of the Company and Vice Chairman
of the Board. More recently, Mr. R. Brad Martin resigned from the Board,
effective March 10, 1997.
8
<PAGE> 11
EXECUTIVE OFFICERS
The Executive Officers shown below currently serve in the capacities
indicated. Executive Officers are appointed by the Board of Directors and serve
at the pleasure of the Board.
<TABLE>
<CAPTION>
NAME AND AGE POSITION, PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS
- ------------ ------------------------------------------------------
<S> <C>
Stephen Bebis, 44............................ Chairman of the Board and Chief Executive of the Company since
February 1996. Mr. Bebis assumed the duties of President in
March of 1996. Mr. Bebis previously served as President of
Aikenhead's Home Improvement Warehouse in Canada, a Canadian
home improvement warehouse chain headquartered in Toronto,
which he started at the request of and as a subsidiary of
Canada's Molson Companies Limited in 1991, and the controlling
interest of which was acquired by The Home Depot Inc. in 1994.
Mr. Bebis remained in that position until December 1995. Prior
to that, Mr. Bebis had been with The Home Depot Inc. in the
United States in various capacities, with his last position at
Home Depot being that of vice president of the company's
mid-south division.
Raymond P. Springer, 46...................... Executive Vice President and Chief Financial Officer of the
Company since April, 1996. Previously, Mr. Springer served as
Senior Vice President of Administration and Chief Financial
Officer of Kash n' Karry Food Stores, Inc. ("Kash n' Karry")
from 1987 until 1996. Kash n' Karry filed for protection under
Chapter 11 of the Bankruptcy Code in Delaware on November 9,
1994, and its bankruptcy plan was effective December 29, 1994.
Robert J. Wittman, 52........................ Executive Vice President-Chief Merchandising Officer since March
1996. Mr. Wittman previously served as Executive Vice President
and Chief Operating Officer of Orchard Supply Hardware, a
California-based hardware store chain (1995-1996), President of
Wittman & Associates, a global marketing management consulting
firm (1994-1995), and Vice President of Marketing and
Merchandising for Aikenhead's Home Improvement Warehouse
(1991-1994).
</TABLE>
9
<PAGE> 12
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth, for the years ended January 31, 1997,
January 28, 1996, and January 29, 1995, the cash compensation paid by the
Company, as well as other compensation paid or accrued for these years, as to
the Company's Chief Executive Officer and to each of the other executive
officers ("Named Officers").
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION AWARDS
ANNUAL -----------------------------------
COMPENSATION SECURITIES
----------------------------------------------- RESTRICTED UNDERLYING
OTHER ANNUAL STOCK STOCK ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS OPTIONS(#) COMP.(1)
- --------------------------- ----- -------- -------- ------------ ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Stephen Bebis 1996 $290,769 $193,846(2) $ 30,361(3) $218,750(4) 300,000 $ 4,063
Chief Executive Officer 1995 N/A(5) N/A N/A N/A N/A N/A
1994 N/A N/A N/A N/A N/A N/A
Jim W. Bradke 1996 $ 12,692(6) $ -0- $ -0- -0- 236,500 $330,827(7)
Former Chief 1995 324,231 -0- -0- -0- 40,000 27,780
Executive Officer 1994 300,000 -0- -0- -0- 69,000(8) 5,764
Raymond P. Springer 1996 $145,385 $ 72,692(2) $ -0- -0- 150,000 $ 1,954
Executive Vice President, 1995 N/A(9) N/A N/A N/A N/A N/A
Chief Financial Officer 1994 N/A N/A N/A N/A N/A N/A
Robert J. Wittman 1996 $207,692 $138,461(2) $157,997(3) -0- 240,000 $ 1,969
Executive Vice President, 1995 N/A(10) N/A N/A N/A N/A N/A
Chief Merchandising 1995 N/A N/A N/A N/A N/A N/A
Officer
</TABLE>
- ---------------
(1) Includes Company contributions and participant forfeitures allocated to the
accounts of the Named Officers in the Company's Profit Sharing and 401(k)
Savings Plan and the Executive Deferred Compensation Plan, premiums paid by
the Company for insurance policies on the lives of the Named Officers, the
benefits of which are payable to the designated beneficiary of each Named
Officer and limited medical reimbursements paid to certain Named Officers.
(2) Represents a portion of the Named Officer's minimum guaranteed bonus,
pursuant to the terms of the Named Officer's employment agreement. Bonus
actually paid for fiscal year 1996 may exceed this figure once Compensation
Committee determines bonuses to be paid.
(3) Represents amounts paid to the Named Officer in connection with relocation
expenses.
(4) Reflected as the dollar value of stock on the date of grant multiplied by
the number of shares of the Company's restricted stock awarded (50,000
shares). These shares are subject to vesting over a period of three years.
(5) Mr. Bebis joined the Company in February 1996 and accordingly received no
compensation from the Company prior to that date.
(6) Mr. Bradke resigned as President and Chief Executive Officer in February
1996.
(7) Includes $323,654 in severance pay pursuant to the terms of Mr. Bradke's
Termination and Severance Agreement, paid following Mr. Bradke's
resignation.
(8) Reflects adjustment in option shares resulting from a 3 for 2 stock split
in the form of a stock dividend effected in September 1994.
10
<PAGE> 13
(9) The Named Officer joined the Company in April 1996 and, accordingly,
received no compensation from the Company prior to that date.
(10) The Named Officer joined the Company in March 1996 and, accordingly,
received no compensation from the Company prior to that date.
OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information concerning the grant of stock
options under the Company's Stock Incentive Plans to the Named Officers during
the last fiscal year.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------
% OF TOTAL
OPTIONS POTENTIAL REALIZABLE VALUE
GRANTED AT ASSUMED ANNUAL RATES
TO OF STOCK PRICE APPRECIATION
OPTIONS EMPLOYEES EXERCISE OR FOR OPTION TERM(1)
GRANTED IN FISCAL BASE PRICE EXPIRATION ---------------------------
NAME (#)(2) YEAR(3) ($/SHARE)(4) DATE 5% 10%
- ---- -------- ---------- ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Stephen Bebis................... 300,000 22.78% $4.375 2/6/2006 $ 825,424 $2,091,787
Jim W. Bradke................... None(5)
Raymond P. Springer............. 150,000 11.39 6.875 4/15/2006 648,548 1,643,547
Robert J. Wittman............... 240,000 18.22 7.375 3/25/2006 1,113,143 2,820,924
</TABLE>
- ---------------
(1) Gains are reported net of the option exercise price, but before taxes
associated with exercise. These amounts represent certain assumed rates of
appreciation only. Actual gains, if any, on stock option exercises are
dependent on the future performance of the Common Stock and overall stock
market conditions. The amounts reflected in this table may not necessarily
be achieved.
(2) All options granted in 1996 to the Named Officer vest over five years,
pursuant to the terms of the Named Officer's Employment Agreement, at the
rate of 40% after two years from date of grant and 20% at the end of each
subsequent year.
(3) Reflected as a percentage of total option grants to all employees under both
1989 Stock Incentive Plan and the 1996 Stock Incentive Plan. A total of
764,666 option grants were made under the 1989 Stock Incentive Plan and
552,279 option grants were made under the 1996 Stock Incentive Plan.
(4) All options were originally granted at the market value on the date of
grant. The exercise price and tax withholding obligations related to
exercise may be paid by delivery of already owned shares, subject to certain
conditions.
(5) Mr. Bradke received no option grants during fiscal 1996, but in connection
with his resignation and pursuant to the terms of his Termination and
Severance Agreement, all unvested options previously granted vested
immediately upon the effective date of his termination (February 9, 1996),
and were, to the extent any of such options had an exercise price in excess
of $5.00 per share, repriced at $5.00 per share. Pursuant to Mr. Bradke's
Termination and Severance Agreement, the terms of all such options were
reduced such that their expiration date was February 9, 2001. As of December
2, 1996, Mr. Bradke exercised all his options and sold the underlying
shares.
11
<PAGE> 14
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following table sets forth information with respect to the Named
Officers concerning the exercise of options during 1995 and unexercised options
held by the Named Officers at fiscal year end.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS HELD AT FISCAL IN-THE-MONEY OPTIONS AT
SHARES YEAR END(#) FISCAL YEAR END(1)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE(#) REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ----------- ---------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Stephen Bebis................. -0- -0- 0/300,000 00/$600,000
Jim W. Bradke................. 321,190 $1,422,387 0/0 (2) 0/00
Raymond P. Springer........... -0- -0- 0/150,000 0/00 (3)
Robert J. Wittman............. -0- -0- 0/240,000 0/00 (3)
</TABLE>
- ---------------
(1) Represents the difference between the closing price of the Company's Common
Stock at the end of fiscal year 1996 ($6.375) and the exercise price of the
options.
(2) All of Mr. Bradke's outstanding options vested immediately upon his
termination, February 9, 1996, pursuant to the terms of his Termination and
Severance Agreement and as of December 2, 1996 he exercised all outstanding
options and sold the underlying shares.
(3) No options for the indicated officers were in-the-money.
12
<PAGE> 15
REPORT OF THE COMPENSATION COMMITTEE
ON REPRICING OF OPTIONS
Pursuant to the terms of Mr. Bradke's Termination and Severance Agreement,
all unvested options vested immediately upon the effective date of his
termination, February 9, 1996, and were repriced at $5.00 per share, to the
extent any such options had an exercise price in excess of $5.00 per share. The
remaining term on each option was reduced such that these options were
exercisable only for a period of five years from the date of his termination.
The table below shows specific information as to such repricing for Mr. Bradke.
No other executive officer has, during the last ten completed fiscal years, held
options or SARs which have been repriced. In addition, outstanding options held
by certain executive officers who terminated their employment during fiscal 1996
were amended to extend the expiration date of such vested options for two years
from the date of the termination of their employment.
10-YEAR OPTION/SAR REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF MARKET ORIGINAL OPTION
SECURITIES PRICE OF EXERCISE TERM REMAINING
UNDERLYING STOCK AT PRICE AT NEW AT DATE OF
OPTIONS TIME OF TIME OF EXERCISE REPRICING OR
NAME DATE REPRICED REPRICING REPRICING PRICE AMENDMENT
---- ------ ---------- --------- --------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Jim W. Bradke 2/9/96 127,500 $5.25 $11.66 $5.00 6 years
2/9/96 69,000 5.25 29.33 5.00 8 years
2/9/96 40,000 5.25 11.625 5.00 9 years
</TABLE>
COMPENSATION COMMITTEE
Hal Compton
Chris T. Sullivan
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
During the fiscal year ended January 31, 1997, Messrs. Hal Compton, Brad
Martin, Steven A. Raymund and Chris T. Sullivan served on the Compensation
Committee. None of them are or were formerly officers of the Company and there
were no interlocks between them or any of the Company's executive officers.
13
<PAGE> 16
PERFORMANCE GRAPH
CUMULATIVE TOTAL RETURN COMPARISON
AMONG SPORTS & RECREATION, INC., S&P MIDCAP 400 INDEX AND MIDCAP
RETAIL -- SPECIALTY INDEX
FISCAL YEAR ENDING DECEMBER 31
The following line graph compares the cumulative total stockholder return
on the Company's Common Stock from September 16, 1992, the effective date of the
Company's initial public offering through January 31, 1997, with the cumulative
total return on the Standard & Poor's Midcap 400 Index ("S&P Midcap 400 Index")
for the same period, and the Standard & Poor's Specialty Retail Index ("S&P"
Retail -- Specialty") for the period from January 4, 1993, its date of
inception, through January 31, 1997. In accordance with the rules of the
Securities and Exchange Commission, the returns are indexed to a value of $100
at September 16, 1992 and January 4, 1993 for the S&P Retail -- Specialty
Index).
[GRAPH]
<TABLE>
<CAPTION>
Measurement Period S&P Midcap 400 S&P Retail -
(Fiscal Year Covered) JumboSports Inc. Index Specialty
<S> <C> <C> <C>
9/16/92 100 100 100(1)
1/29/93 161 107 97
1/28/94 191 120 100
1/27/95 249 93 69
1/28/96 61 143 61
1/31/97 71 172 62
</TABLE>
- ---------------
(1) Assumes $100 invested on January 4, 1993, the inception date of the S&P
Retail -- Specialty Index.
14
<PAGE> 17
COMPENSATION COMMITTEE REPORT
General. The Compensation Committee (the "Committee") currently consists
of Hal Compton and Chris T. Sullivan, neither of whom is an employee of the
Company. The Committee reviews and approves executive compensation and
administers and makes recommendations concerning all of the Company's
compensation-related plans. At the request of the Committee, the Chief Executive
Officer, Mr. Bebis made recommendations to the Committee during the most recent
fiscal year concerning the compensation of the executive officers, other than
himself, which compensation was negotiated pursuant to employment agreements
with each of the named executive officers. Mr. Bebis did not participate in the
Committee's final decision with respect to approving said officers' employment
agreements and their compensation. At the time of these decisions, R. Brad
Martin, who resigned from the Board of Directors after the end of fiscal 1996,
and Steven A. Raymund were also members of the Committee.
The current executive compensation program consists of base salary, annual
performance incentives, long-term incentive opportunities in the form of stock
options, restricted stock and benefits. Base salaries are generally lower than
those of comparable companies, but are combined with higher annual incentive
plans based on the Company's financial performance. The Committee believes this
policy allows the Company to attract and retain high quality personnel, while at
the same time maximizing Company performance. Long-term incentive compensation
is based on stock performance through stock options. The Committee's position is
that stock ownership by management is beneficial in aligning management's and
stockholder's interests to enhance stockholder value.
Certain non-performance-based compensation to executives of public
companies in excess of $1,000,000 is no longer deductible for tax purposes. It
is the responsibility of the Committee to determine whether any actions with
respect to this new compensation limit should be taken by the Company. During
1996, no current executive officers of the Company received any compensation in
excess of this limit nor is it anticipated that any executive officer will
receive any such compensation during fiscal year 1997. Therefore, the Committee
has not taken any action to date to comply with this new limit. The Committee
will continue to monitor this situation and will take appropriate action if it
is warranted in the future.
Base Compensation. In setting the 1996 base salary for the Chief Executive
Officer, the Committee reviewed the Company's needs in light of its financial
performance during the 1995 fiscal year, considering in particular, store-base
expansion, sales, expense control, net income and earnings per share compared to
comparable companies, as well as industry studies provided to the Committee by
compensation specialists. Accordingly, the Committee approved an Employment
Agreement with Mr. Bebis, which was negotiated at arm's length, providing a base
salary for fiscal 1996 of $300,000, with a guaranteed bonus of $200,000 for
fiscal year 1996. He will be eligible for additional performance bonuses based
on criteria to be established by the Board. In addition, Mr. Bebis received a
grant of 50,000 shares of restricted stock which will vest on February 8, 1999
and was granted options for an additional 300,000 shares which vest according to
a vesting schedule beginning February 8, 1998 and ending February 8, 2001.
Additional incentive stock options to purchase up to 200,000 additional shares
are to be granted to Mr. Bebis, provided that he continues to be employed by the
Company on such grant dates, from February 8, 1997 through February 8, 2000,
which option grants will vest in accordance with a vesting schedule that begins
on February 8, 1999 and ends on February 8, 2005. Additionally, the Company
agreed to make certain stock purchase assistance loans to Mr. Bebis to encourage
him to purchase Company shares. As of March 30, 1997, the Company has loaned
$166,667 to Mr. Bebis in connection with his purchase of 50,000 shares of the
Company's common stock, which loan bears interest at a per annum rate of 6.51%,
which was equal to the federal long-term rate (within the meaning of Section
1274(d)(1)(A) of the Internal Revenue Code of 1986, as amended) (the "Federal
Long-Term Rate") on the date of such loan. The
15
<PAGE> 18
contract also provides certain severance and other benefits in the event of a
termination without cause or a change of control.
The terms of the employment agreements for Messrs. Springer and Wittman
were also negotiated at arms' length and, as stated above, were approved by the
Committee upon Mr. Bebis's recommendation. Mr. Wittman's salary for his first
year of employment with the Company (March 1996-March 1997) was $240,000, with a
minimum bonus for that year of $160,000. Mr. Wittman also received stock options
to purchase 240,000 shares, vesting in accordance with a vesting schedule
beginning on March 25, 1998 and ending March 25, 2001, and stock purchase
assistance loans designed to encourage him to purchase Company shares. As of
March 30, 1997, the Company has loaned $152,417 to Mr. Wittman in connection
with his purchase of 31,000 shares of the Company's common stock, which loan
bears interest at a per annum rate of 6.54%, which was equal to the Federal
Long-Term Rate on the date of such loan. Mr. Springer's salary for his first
year of employment with the Company (April 1996-April 1997) was $180,000, with a
minimum bonus for that year of $90,000. Mr. Springer also received stock options
for 150,000 shares, vesting in accordance with a vesting schedule beginning on
April 15, 1998 and ending on April 15, 2001, and stock purchase assistance loans
designed to encourage him to purchase Company shares. As of March 30, 1997, the
Company has loaned $137,500 to Mr. Springer in connection with his purchase of
30,000 shares of the Company's common stock, which loan bears interest at a per
annum rate of 7.04%, which was equal to the Federal Long-Term Rate on the date
of such loan.
Annual Performance Incentives. The terms of the employment agreements with
Mr. Bebis and the Named Officers, which were approved by the Compensation
Committee, provide for specified guaranteed bonuses this year, as earlier
described, with additional performance bonuses payable only if Board-established
criteria with respect to earnings targets and other factors is achieved. In
fiscal 1996, the Company established a Management Cash Bonus Program (the "Bonus
Program") which replaced the previously existing cash bonus program. The new
Bonus Program covers only middle and senior level managers, other than the Named
Officers, and is not administered by the Compensation Committee but rather by
the Company's Vice President for Human Resources. The Bonus Program provides
cash payouts of up to 50% of the base salary for Store Managers and
Merchandisers; there is no limit to the bonus potential for more senior
positions. All such bonuses are to be paid only upon the Company meeting or
exceeding specified sales and profit targets set by the Named Officers. The
Committee believes that the Bonus Program provides an incentive to management to
achieve the Company's short-term goals by putting a significant portion of
annual compensation at risk.
Long-term Incentives. Under the Company's 1989 Stock Incentive Plan (the
"1989 Incentive Plan") the Committee is authorized to grant stock options and
similar stock performance rights to members of management. During fiscal 1996,
the Board of Directors adopted an additional stock incentive plan, with terms
substantially similar to those of the 1989 Incentive Plan, solely for employees
who are not executive officers or otherwise subject to the reporting
requirements of Section 16 of the Securities Exchange Act of 1934 (the "1996
Incentive Plan," both the 1989 and the 1996 Incentive Plans being jointly
referred to as the "Incentive Plans"). The stock option grants to each of the
Named Officers in fiscal 1996 were pursuant to the terms of their respective
employment agreements and are set forth on the Summary Compensation Table on
page 10. Said options were granted with an exercise price equal to the fair
market value on the date of grant, have a 10-year term and vest over five years
at the rate of 40% after two years from the date of grant and 20% at the end of
each subsequent year. The Committee believes that such stock options are an
appropriate mechanism for long-term incentives since they provide a direct link
between management's and stockholders' interests, wherein both benefit as the
price of the Company's Common Stock increases.
Other Benefits. The benefit package offered to executive officers is
substantially similar to that offered to all full-time employees with respect to
insurance and retirement savings, except that certain insurance-related out-
16
<PAGE> 19
of-pocket expenses incurred by the executive officers are reimbursed by the
Company. In addition, the executive officers have supplemental life insurance
benefits, the premiums of which are paid by the Company and a deferred
compensation plan is also available to the executive officers. The Company
estimates that the value of such benefits represents less than 10% of total
annual compensation to each executive officer.
1996 Compensation to Mr. Bradke. The employment of Mr. Bradke terminated
effective February 9, 1996. Under Mr. Bradke's Termination and Severance
Agreement he will, as severance, continue to receive his base salary during the
three years following the date of his termination, was granted immediate vesting
of all his outstanding options, all of which options having an exercise price in
excess of $5.00 being repriced at $5.00 and the expiration date for all such
options was reduced to the fifth anniversary of his termination date.
Mr. Bebis's contract was negotiated by the Committee at arm's length after
retaining a search firm to locate a suitable candidate to fill his position. His
contract is for a term of three years and renews annually.
COMPENSATION COMMITTEE
Hal Compton
Chris T. Sullivan
---------------------
PROPOSED AMENDMENT TO CLASSIFY THE
BOARD OF DIRECTORS
(PROPOSAL NO. 2)
The Board of Directors has unanimously approved and recommends that the
shareholders approve a Proposed Amendment to the Corporation's Articles of
Incorporation which adds a new Article IX to the Articles of Incorporation to
provide for the classification of the Corporation's directors, the filling of
vacant directorships and the removal of directors only for cause.
Because the Proposed Amendment to the Articles of Incorporation may have an
impact upon the rights of shareholders and may be characterized as an
anti-takeover measure which, if adopted, may tend to insulate management and
make the accomplishment of certain transactions involving a potential change of
control of the Corporation more difficult, each shareholder should carefully
study the description of the Proposed Amendment contained herein and the text of
the Proposed Amendment as set forth in Exhibit A to this Proxy Statement. Other
than the existence of a shareholders' rights plan under which each shareholder
has the right to purchase shares of the Company's common stock at a price which
is below fair market value in the event of an attempted takeover, there are
presently no other provisions in the Corporation's Articles of Incorporation or
Bylaws which would commonly be characterized as anti-takeover measures. Certain
provisions of Florida corporate law have an anti-takeover effect with respect to
the Corporation. Under the law, if there is a "control-share acquisition," which
is the acquisition of certain percentages of the voting power of a company which
could give the acquiror varying degrees of voting control, disinterested
shareholders must, with certain exceptions, approve a resolution granting the
holder of such control shares voting rights before they are entitled to vote the
control shares. Additionally, Florida has an affiliated transactions statute
which makes certain transactions, including mergers or consolidations, with
shareholders who own five percent or more of the outstanding shares of the
Corporation more difficult. The description of the Proposed Amendment set forth
below is qualified in its entirety by reference to the full text of the Proposed
Amendment as set forth in Exhibit A.
17
<PAGE> 20
REASONS FOR THE PROPOSED AMENDMENT
Over the last several years there has been a trend towards the accumulation
of substantial stock positions in public corporations by outside parties either
with a view toward utilizing a controlling block of stock to force a merger or
consolidation or as a prelude to proposing a restructuring or sale of all or
part of a corporation or other similar extraordinary corporate action requiring
the approval of its board of directors. These actions are often undertaken
without advance notice to or consultation with management of the corporation. In
many cases, such third parties seek representation on the corporation's board of
directors in order to increase the likelihood that their proposals will be
implemented by the corporation. If the corporation resists the efforts to obtain
representation on the corporation's board, the outside parties may commence
proxy contests to have themselves or their nominees elected to the board in
place of certain directors or the entire board.
It is believed that in many circumstances such efforts may not be
beneficial to the interests of a corporation and its shareholders, because they
may deprive management of the time and information necessary to evaluate the
proposals, to study alternative proposals and to help ensure that the best price
is obtained in any transaction which may ultimately be undertaken. Thus, the
Proposed Amendment is designed to protect against rapid shifts in control of the
Board of Directors and assist in assuring continuity in the management, affairs
and business strategies of the Corporation. The Corporation is not aware of any
specific effort by a party to obtain control of the Corporation.
The Board of Directors believes that the Proposed Amendment would help
ensure continuity of experience which is desirable and in the best interests of
the Corporation and its shareholders generally. The Board of Directors of the
Corporation has set the number of directors at six in accordance with Article II
of the Bylaws which allows either the Board or the Stockholders to increase or
decrease the number of directors.
The Proposed Amendment would make a change in directors and management for
any reason more difficult at each election of directors even if this would be
beneficial to shareholders generally because the staggering of terms of
directors would have the effect of requiring at least two shareholder meetings,
instead of one, as at present, to effect a change in majority control of the
Board and would prohibit removal of incumbent directors by a holder of a large
block of the Corporation's shares except for cause. If the Proposed Amendment is
adopted, shareholders will elect directors to longer terms and the slate of
nominees for director, if elected or re-elected, would be the initial
beneficiaries of the extended terms.
THE PROPOSED AMENDMENT
The Proposed Amendment is consistent with Florida corporate law, which
authorizes the classification of a board of directors into two or three classes.
Florida corporate law also provides that a corporation's articles of
incorporation may contain procedures for removal of directors and filling
vacancies on the board. Shareholders should note that absent the limitation on
the removal of directors contained in the Proposed Amendment, they would have
the right under applicable Florida corporate law to remove directors, with or
without cause, if the number of votes cast to remove such director exceeds the
number of votes cast not to remove such director.
The Proposed Amendment will be adopted if the votes cast in favor of the
Proposed Amendment exceed the number of votes opposing it. The Board of
Directors recommends a vote "FOR" approval of the Proposed Amendment and all
proxies received will be voted in favor thereof unless a contrary specification
is made on the proxy by the shareholder.
The Articles of Incorporation do not currently address the number of
directors. The Bylaws currently provide that the number of directors may be
fixed from time to time by action of the stockholders or the directors,
18
<PAGE> 21
or, if the number is not fixed, the number shall be at least one. Additionally,
the number of directors may be increased or decreased by action of the
stockholders or directors. Currently, the board has set the number of directors
at six.
The Proposed addition of Article IX provides that the number of directors
shall be not less than three nor more than 15, the exact number to be fixed in
accordance with the Bylaws. The Proposed Amendment also provides that the Board
of Directors will be divided into three classes, each class to be as nearly
equal in number as possible. If the Proposed Amendment is adopted, two directors
will be elected for a term expiring at the 1998 annual meeting; two directors
will be elected for a term expiring at the 1999 annual meeting; and two
directors will be elected for a term expiring at the 2000 annual meeting; and,
in each case, until their respective successors are duly elected and qualified.
Starting with the 1998 annual meeting of stockholders, one class will be elected
each year for a three-year term.
The Proposed Amendment also provides that a majority of the remaining
directors may fill a vacancy on the Board occurring during the course of the
year, and the new director so elected will serve for the remainder of his or her
predecessor's term. In the event that a new directorship is created due to an
increase in the fixed number of directors, a majority of the directors in office
may fill such newly-created directorship, and the new director so elected will
serve for the same terms as that of the other directors of the class of which he
or she is a member.
The Proposed Amendment also provides that directors may be removed only by
shareholders holding at least a majority of the outstanding Common Stock acting
at a meeting called for such purpose and only for cause. "Cause" for purposes of
the Proposed Amendment shall be construed to exist only if (i) the director
whose removal is proposed has been convicted of a felony by a court of competent
jurisdiction and such conviction is no longer subject to direct appeal, (ii) has
been judged by a court of competent jurisdiction to be liable for negligence or
misconduct in the performance of his or her duty to the Corporation in a matter
of substantial importance to the Corporation, and such adjudication is no longer
subject to a direct appeal or (iii) any other situation exists which eighty
percent (80%) of the other directors agree constitutes cause for removal.
The effect of this provision is to extend the term of certain of the
Company's current directors and to permit the election of only a limited number
of directors each year, thus preventing a majority shareholder from taking
control of the Board by filling newly-created vacancies.
DIRECTORS
Proposal No. 1 of this Proxy Statement sets forth the six nominees for
election to the Board of Directors of the Corporation. If Proposal No. 2 is
adopted, the six directors elected to office under Proposal No. 1 shall serve
for the terms set forth below. If Proposal No. 2 is not adopted, the six
directors elected will hold office until the next annual meeting of shareholders
or until their successors are duly elected and qualified. In either case,
directors will be elected by a plurality of the votes cast by the shares
entitled to vote in an election at a meeting at which a quorum is present.
Directors to be Elected to Serve Until the 1998 Annual Meeting:
Ronald Vaughn
Jack E. Bush
Directors to be Elected to Serve Until the 1999 Annual Meeting:
Samuel Northrop, Jr.
Harold Compton
19
<PAGE> 22
Directors to be Elected to Serve Until the 2000 Annual Meeting:
Stephen Bebis
Steven A. Raymund
Approval of the amendment to the articles of incorporation in accordance
with this proposal requires that the votes cast in favor of the proposal exceed
the votes cast opposing it at the Annual Meeeting. THE BOARD UNANIMOUSLY
RECOMMENDS THE STOCKHOLDERS VOTE "FOR" THIS PROPOSAL.
AMENDMENT OF THE 1989 STOCK INCENTIVE PLAN
(PROPOSAL NO. 3)
The Board of Directors has adopted, subject to stockholder approval at the
Annual Meeting, an amendment to the Company's 1989 Stock Incentive Plan (the
"1989 Plan") to increase by 1,000,000 shares the number of shares available for
issuance thereunder. If ratified by the stockholders, the amendment will become
effective immediately. Options under this plan may be granted to any employee
who has been designated as a key employee. Since March 1996 this plan has been
used exclusively for granting options under the exemption provisions of Section
16(b) under the Securities Exchange Act of 1934 (the "Exchange Act"). In March
of 1996, the Company adopted an additional stock incentive plan, the 1996 Stock
Incentive Plan, for issuance of stock options to Company employees who are not
subject to the reporting requirements of Section 16 under the Exchange Act (the
"1996 Plan"). One million shares are reserved for issuance under the 1996 Plan,
and options to purchase a total of 597,538 shares were granted to employees
thereunder. Vesting and grant provisions are similar under both the 1989 Plan
and the 1996 Plan.
The Board of Directors and the Compensation Committee believe that stock
options and stock appreciation rights ("SAR's") are appropriate mechanisms for
long-term incentives since they provide an effective link between management's
and stockholders' interests because both management and stockholders will then
benefit when the price of the Company's Common Stock increases.
A large number of shares available under the 1989 Plan have been granted in
the form of stock options and a limited number of shares of restricted stock. To
date, no SAR's have been granted under the 1989 Plan. The Board believes that,
in order to continue to provide an incentive to attract and retain key employees
of outstanding ability and to provide incentives to those employees responsible
for the success of the Company, additional shares should be made available under
the 1989 Plan. Accordingly, the Board of Directors has adopted the amendment to
the 1989 Plan attached hereto as Exhibit B, subject to shareholder approval,
which would increase the number of shares that may be issued thereunder by
1,000,000 shares.
Approval of the amendment to the 1989 Plan requires that the votes cast in
favor of the proposal exceed the votes cast opposing it at the Annual Meeting.
THE BOARD RECOMMENDS THE STOCKHOLDERS VOTE "FOR" THIS PROPOSAL.
SUMMARY OF 1989 PLAN AS TO BE AMENDED
Stock Subject to the 1989 Plan. If the proposed amendment is ratified, a
total of 3,212,212 shares of the Company's Common Stock will be made available
under the 1989 Plan, subject to appropriate adjustment for stock dividends,
stock splits, recapitalization or similar changes in the rights of outstanding
shares of Common Stock. Grants under the 1989 Plan will be in the form of stock
options, restricted stock, or SAR's. Of the total shares available under the
1989 Plan, 301,120 shares were issued as restricted stock prior to the Company's
initial
20
<PAGE> 23
public offering in September 1992, 50,000 shares of restricted stock were issued
in fiscal 1996 in connection with the recruiting of the Chief Executive Officer,
and, excluding any options cancelled, options covering 2,072,555 shares have
been granted under the 1989 Plan through March 31, 1997. If any right granted
under the 1989 Plan terminates or expires prior to exercise thereof, the shares
allocable to that unexercised right will again be available for grant under the
1989 Plan.
Administration. The 1989 Plan is administered by the Compensation
Committee of the Board of Directors, which currently consists of two members of
the Board of Directors who qualify as "disinterested persons" under the
Securities and Exchange Act of 1934, and accordingly, are not employees of the
Company nor are they eligible to receive discretionary grants under the 1989
Plan. The Compensation Committee has full authority to interpret and administer
the 1989 Plan.
Eligibility; Grant and Exercise of Awards. Under the terms of the 1989
Plan, at such times as the Compensation Committee deems appropriate, awards in
the form of either stock options, restricted stock, or SAR's may be granted to
eligible employees based on the employee's responsibility and individual
performance, as well as the Company's performance as a whole. All grants are
made at the sole discretion of the Compensation Committee. On March 19, 1997,
the closing price of the Company's Common Stock was $6.125 per share. No
fractional shares may be granted or issued under the 1989 Plan.
Stock Options. Stock option awards will either qualify as incentive
stock options under Section 422 of the Code ("ISO's") or will not so
qualify ("NQSO's"). In the past, options have typically been granted with
an exercise price equal to the fair market value of the optioned shares on
the date of grant, provisions for vesting in 25% increments commencing on
the first anniversary of the grant date, and with an expiration date of ten
years after the grant date. However, subject to certain restrictions,
options may be issued under the 1989 Plan upon such terms and conditions as
the Compensation Committee may from time to time determine, provided that
the exercise price for any ISO may not be less than 100% of the fair market
value of the optioned shares as of the date of grant and the exercise price
of an NQSO may not be less than 50% of the fair market value of the
optioned shares on the date of grant. No options may be granted with a term
of more than 15 years. To qualify as an ISO, an option must meet additional
federal tax requirements. Under current law, ISO requirements include
limits on the value of ISO's that become exercisable during any single year
with respect to each optionee, and a shorter exercise period.
Payment for Common Stock purchased upon exercise of any option granted
under the 1989 Plan must be in cash at the time of exercise, except that if
either the option so provides or the Compensation Committee so permits, and
if the Company is not then prohibited from purchasing or acquiring shares
of its Common Stock, such payment may be made in whole or in part with
already owned shares of Common Stock. The value of any such Common Stock
delivered as payment shall be determined by such means as the Compensation
Committee shall establish. The Compensation Committee also has discretion
to permit payment by such other alternative means as may be lawful,
including by delivery of an executed exercise notice together with
irrevocable instructions to a broker promptly to deliver to the Company the
amount of sale or loan proceeds required to pay the exercise price. This
procedure is commonly known as a "cashless exercise."
Stock Appreciation Rights. The Compensation Committee may also grant
SAR's under the 1989 Plan on terms and conditions determined by the
Compensation Committee which may or may not be associated with stock
options. SAR's entitle the holder, upon exercise, to receive an amount in
cash and/or Common Stock (as determined by the Compensation Committee)
equal in value to the increase since the date of grant
21
<PAGE> 24
in the fair market value of the Common Stock covered by such right. To
date, no SAR's have been granted under the 1989 Plan.
Plan Benefits. Because grants under the 1989 Plan are at the discretion of
the Compensation Committee and because the performance of the Company's Common
Stock cannot accurately be predicted, the benefit which may be derived by
employees by virtue of additional shares available under the 1989 Plan is not
determinable. However, the following table sets forth option grants under the
1989 Plan during fiscal 1996. Since adoption of the 1989 Plan and as of March
31, 1997, options for the purchase of a total of 2,072,555 shares of the
Company's Common Stock have been granted to Company employees, including
executive officers, and to non-employee directors. Unless otherwise indicated,
all such awards were granted at fair market value. Grants of restricted stock
under the Plan have been limited and have been omitted from the chart below.
1989 STOCK INCENTIVE PLAN OPTION GRANTS
DURING FISCAL 1996
<TABLE>
<CAPTION>
DOLLAR NUMBER OF
NAME AND POSITION VALUE(1) UNITS(#)(2)
- ----------------- -------- -----------
<S> <C> <C>
Stephen Bebis............................................... $525,000(3) 300,000
Chairman of the Board, Chief
Executive Officer and President
Raymond Springer............................................ $ 0(4) 150,000
Chief Financial Officer
Robert Wittman.............................................. $ 0(5) 240,000
Jim W. Bradke............................................... N/A(6) 0
Former Chief Executive Officer
All Current Executive Officers.............................. $525,000 690,000
as a group (3 persons)
Non-Employee Directors (4 persons).......................... $ 0(7) 33,000(8)
Non-Executive Officer Employees............................. $ 0 0(9)
</TABLE>
- ---------------
(1) Represents the difference between the closing price of the Company's Common
Stock on March 19, 1997 and the exercise price of the options.
(2) Total number of units includes unvested options to purchase shares granted
to each of the Named Executive Officers pursuant to the terms of their
respective Employment Agreements.
(3) Consists of unvested options to purchase 300,000 shares at an exercise price
of $4.375 per share granted on February 6, 1996, all of which were in the
money as of March 19, 1997, which vest over five years at a rate of 40%
after the first two years from the date of grant, and 20% each subsequent
year.
(4) Consists of unvested options to purchase 150,000 shares at an exercise price
of $6.875 per share, none of which were in the money as of March 19, 1997.
(5) Consists of unvested options to purchase 240,000 shares at an exercise price
of $7.375 per share, none of which were in the money as of March 19, 1997.
(6) All options previously granted to him under the Plan (321,190) were vested
and exercised as of December 2, 1996, with a total value realized of
$1,422,387.
(7) No outstanding options were in the money as of March 19, 1997.
(8) Consists of vested options to purchase 1,000 shares at an exercise price of
$8.875 per share granted to each of Messrs. Martin, Raymund and Sullivan on
June 11, 1996, unvested options to purchase 10,000 shares at an
22
<PAGE> 25
exercise price of $8.625 per share granted to Mr. Northrop on October 28,
1996, and unvested options to purchase 10,000 shares at an exercise price of
$6.750 per share granted to each of Messrs. Vaughn and Compton on February
18, 1997.
(9) No options were granted to non-executive officer employees under the 1989
Stock Incentive Plan during fiscal 1996, since option grants for these
employees were awarded under the 1996 Stock Incentive Plan. Under the 1996
Stock Incentive Plan, options to purchase a total of 511,036 shares were
granted to non-executive officer employees.
Transferability. Awards granted under the 1989 Plan are, during the
lifetime of a participant, exercisable only by the participant and are not
transferrable or assignable in whole or in part otherwise than by the laws of
descent and distribution.
Amendment and Termination. The Board of Directors may amend the 1989 Plan
at any time provided that no amendment shall: (i) without a participant's
consent, terminate rights previously granted or otherwise affect the rights of
any participant under an outstanding award and, (ii) without stockholder
approval, increase the maximum number of shares of stock subject to the Plan,
reduce the minimum exercise price of options granted under the 1989 Plan,
increase the benefits accruing to participants under the 1989 Plan or modify
requirements as to eligibility for participation in the 1989 Plan. The 1989 Plan
has a term of ten years, expiring in September 1999, but may be terminated by
the Board of Directors at any time.
Federal Income Tax Consequences. The 1989 Plan does not qualify under
Section 401(a) of the Code. A general summary of the federal income tax
consequences of options granted under the 1989 Plan is stated below. This
summary is based on present federal income tax law and is subject to change as
the laws change.
Stock Options. The grant of stock options under the Plan will not
generate federal taxable income to a participant.
With respect to ISO's, no income will be realized by a participant
upon the participant's purchase of shares of Common Stock pursuant to the
exercise of the option. In order to avail himself of this tax benefit, the
participant must make no disposition of the Common Stock so purchased
before he has held such Common Stock for at least one year after the date
of exercise and at least two years after the date of grant. Assuming
compliance with this and other applicable tax provisions, a participant
will recognize long-term capital gain or loss when the participant disposes
of his or her Common Stock, measured by the difference between the exercise
price and the amount realized for the Common Stock at the time of
disposition. If the participant disposes of Common Stock purchased upon the
exercise of the option before the expiration of the above-noted periods,
any amount realized from such disqualifying disposition will be taxable as
ordinary income in the year of disposition to the extent of the lesser of
the amount realized by the participant in excess of the exercise price or
the spread between the exercise price and the fair market value of the
Common Stock at the time the option is exercised. Any amount realized on
the sale of the shares of Common Stock which is in excess of the fair
market value of the Common Stock on the date of exercise will be treated as
long- or short-term capital gain, depending upon the holding period of the
Common Stock. No deduction will be allowed to the Company for federal
income tax purposes at the time of the grant or exercise of an ISO. At the
time of a disqualifying disposition by a participant, the Company will be
entitled to a deduction for the amount taxable to the participant as
ordinary income.
With respect to NQSO's, generally the exercise of the option will
result in the recognition of ordinary income by the participant for federal
income tax purposes in an amount equal to the difference between the
exercise price and the fair market value of the Common Stock valued as of
the date of the exercise of the option. The Company should be entitled to a
deduction equal to the amount of income recognized by the
23
<PAGE> 26
participant. Upon the later sale of any Common Stock acquired upon the
exercise of a NQSO, any amount realized by the participant in excess of the
amount recognized by the participant as ordinary income at the time of
exercise will be treated as long- or short-term capital gain to the
participant, depending upon the holding period of the Common Stock.
Stock Appreciation Rights. No income will be realized by a
participant in connection with the grant of an SAR. When an SAR is
exercised, the participant will generally be required to include as taxable
ordinary income in the year of exercise an amount equal to the amount of
cash received and the fair market value of any unrestricted Common Stock
received on the exercise. The Company will be entitled to a deduction at
the same time equal to the amount included in such participant's income by
reason of the exercise. If the participant receives Common Stock upon the
exercise of an SAR, the post-exercise appreciation will be treated as long-
or short-term capital gain to the participant, depending on the holding
period of the Common Stock.
RATIFICATION OF V.P. STOCK PURCHASE PROGRAM
(PROPOSAL NO. 4)
The Board of Directors has adopted a V.P. Stock Purchase Program (the
"Program"), and the Board of Directors seeks the ratification of the Program by
the stockholders at the Annual Meeting. The purpose of the Program is to
increase the stake and ownership interest in the Company of certain Company vice
presidents and to align their interests more closely with those of the Company's
stockholders. The Board of Directors seeks the ratification of the Program by
the Stockholder so that the shares issued under the Program may be listed for
trading on the New York Stock Exchange. The New York Stock Exchange provides
that stockholder approval of a stock option or purchase plan under which stock
may be acquired by officers or directors of a company (except for warrants or
rights issued generally to security holders of the company or broadly-based
plans or arrangements) will be a prerequisite to the listing of the shares
issued under the plan on the New York Stock Exchange. The terms and conditions
of the Program are contained in resolutions adopted by the Board of Directors at
the Board's March 13, 1997, meeting. A copy of such resolutions are attached to
this Proxy Statement as Exhibit C, and the description of the Program set forth
below is qualified in its entirety by the text of the resolutions.
The vice presidents who are eligible to participate in the plan were
selected by the Board of Directors at the March 13, 1997 meeting, and a list of
such eligible participants appears in the resolutions which are attached to this
Proxy Statement as Exhibit C. The number of shares which may be sold under the
Program is limited to 50,000 shares, with each eligible participant having the
ability to purchase no more than 5,000 shares under the Program. Under the
Program, eligible participants have the right to purchase shares of the Common
Stock of the Company at a purchase price equal to $6.25 per share, which was the
closing price of the Company's Common Stock on the New York Stock Exchange on
January 23, 1997. The Program also provides that, for each $1.00 that an
eligible participant spends to purchase Common Stock under the Program, the
Company will loan the participant $2.00 toward the purchase of Common Stock
under the Program, but the amount borrowed by any particular participant may not
exceed $20,833. Such loans are evidenced by promissory notes which bear interest
at a per annum rate equal to the most recently-published "federal long-term
rate" within the meaning of Section 1274(d)(1)(A) of the Internal Revenue Code
of 1986, as amended on the date the promissory note is issued. Interest on the
promissory notes is payable annually, and the principal and all accrued but
unpaid interest is due on the fifth anniversary of the date of the execution and
delivery of the promissory note.
24
<PAGE> 27
The Program expired on April 12, 1997, and eligible participants will no
longer have the right to purchase shares under the Program.
Ratification of the Program requires that the votes cast in favor of the
proposal exceed the votes cast opposing it at the Annual Meeting. THE BOARD
RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THIS PROPOSAL.
OTHER MATTERS
The Board of Directors of the Company knows of no other matters that may
come before the meeting. However, if any other matters should properly come
before the meeting or any adjournment thereof, it is the intention of the
persons named in the proxy to vote the proxy in accordance with their best
judgement.
INDEPENDENT PUBLIC ACCOUNTANTS
Coopers & Lybrand L.L.P. ("Coopers & Lybrand") served as the accountants
for the fiscal year ended January 31, 1997, and the Board of Directors has
reappointed them to act as the public accountants for the fiscal year ending
January 30, 1998. Previously, the firm of Deloitte & Touche LLP ("Deloitte &
Touche") served as the Company's independent accountants for the fiscal year
ended January 28, 1996. Deloitte & Touche did not resign, decline to be
reappointed, nor did its report on the Company's financial statements for fiscal
1995 or fiscal 1994 contain an adverse opinion, disclaimer of opinion,
qualification or modification. Furthermore, the Company did not experience any
disagreements with Deloitte & Touche on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure.
The decision to change accountants and the selection of Coopers & Lybrand
was recommended by the Audit Committee and approved by the Board of Directors in
fiscal 1996.
A representative of Coopers & Lybrand is expected to be present at the
Annual Meeting of Stockholders and will have the opportunity to make a
statement, if Coopers & Lybrand so elects, and to respond to appropriate
questions from stockholders.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since the inception of its predecessor, the Company or its predecessor has
leased its executive office space as well as certain of its store locations from
the Jim W. Bradke Trust (the "Bradke Trust"), in which Mr. Bradke has a 12.5%
beneficial interest and for which Mr. Bradke is the trustee. Mr. Bradke served
as Chief Executive of the Company through February 9, 1996. The Company
currently leases its executive offices and seven of its stores from the Bradke
Trust (including one store leased from a partnership controlled by the Bradke
Trust), and it believes that these leases are on terms no less favorable than
are generally obtainable from third parties. Under these leases, monthly lease
payments are required and, under certain of such leases, additional contingent
rents are required up to a specified maximum computed rate as a percentage of
sales in excess of a specified amount. During the fiscal year ended January 31,
1997, the Company paid approximately $1,761,000 in rent to the Bradke Trust and
approximately $213,850 in rent to the partnership controlled by the Bradke
Trust. The Company does not intend to lease any additional properties from the
Bradke Trust.
In connection with their respective employment agreements, and pursuant to
the terms thereof, the Company loaned $166,667, $152,417 and $137,500 to each of
Messrs. Bebis, Wittman and Springer, respectively, to assist them with the
purchase of shares of the Company's common stock. Such loans are payable over a
term of five
25
<PAGE> 28
years from the date of each such loan, and bear interest per annum at the
Federal Long-Term Rate. See "Compensation Committee Report, Base Compensation."
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on a review of Forms 3 and 4 and amendments thereto furnished
to the Company pursuant to Rule 16(a)-3(e) during fiscal year 1996 and Form 5
and amendments thereto furnished to the Company with respect to fiscal year 1996
and any written representation otherwise furnished to the Company, the Company
believes that SEC filing requirements applicable to its Directors and officers
with respect to the Company's fiscal year ended January 31, 1997 have been
fulfilled and that all such filings were made on a timely basis with the
exception of the following: Forms 3 for Messrs. Bebis, Springer, Wittman and
Northrop, which were filed late.
STOCKHOLDERS' PROPOSALS FOR 1998 ANNUAL MEETING
Proposals for stockholder action which eligible stockholders wish to have
included in the Company's proxy materials to be mailed to stockholders in
connection with the Company's 1998 Annual Meeting must be received by the
Company at its corporate headquarters at the address listed on the cover page of
this proxy statement on or before December 31, 1997.
LISTING OF STOCKHOLDERS
A complete list of the stockholders entitled to vote at the Annual Meeting
of the Stockholders, to be held on June 4, 1997, will be available for
inspection during normal business hours at the Company's headquarters for a
period of at least ten days prior to the Annual Meeting, upon written request to
the Company by a stockholder, and at all times during the Annual Meeting at the
place of the meeting.
PROXY SOLICITATION EXPENSES
The cost of this proxy solicitation, including the reasonable expenses of
brokerage firms or other nominees for forwarding proxy materials to the
beneficial owners, will be borne exclusively by the Company. In addition to
solicitation by mail, proxies may be solicited by telephone, telecopy or
personally. Proxies may be solicited by Directors, executive officers and other
employees of the Company without additional compensation.
ANNUAL REPORT
A copy of the Company's Annual Report for the year ended January 31, 1997
is being mailed with this Proxy Statement but is not to be considered a part
hereof.
26
<PAGE> 29
REQUESTS FOR ADDITIONAL INFORMATION
A copy of the Company's annual report on Form 10-K for the year ended
January 31, 1997, including the financial statements and schedules thereto but
excluding the exhibits, may be obtained without charge by any stockholder whose
proxy is solicited hereby upon written request to:
JumboSports Inc.
Communications/Investor Relations Department
4701 W. Hillsborough Avenue
Tampa, FL 33614
By order of the Board of Directors,
Stephen Bebis
Chairman of the Board,
President and Chief Executive Officer
Tampa, Florida
27
<PAGE> 30
EXHIBIT A
PROPOSED ADDITION OF ARTICLE IX TO THE ARTICLES OF INCORPORATION
RESOLVED, that the Articles of Incorporation of the Corporation be amended
by the addition of Article IX which shall be and read in its entirety as
follows:
ARTICLE IX -- DIRECTORS
(a) The number of directors which shall constitute the entire Board of
Directors shall be not less than three (3) nor more than fifteen (15) directors.
Within these limits, the number of directors shall be fixed from time to time in
accordance with the Bylaws. The directors shall be elected at the annual
shareholders' meeting, except as provided in subparagraph (b) of this Article
IX. The directors shall be divided into three (3) classes as nearly equal in
number as may be. At the annual shareholders' meeting in 1997, one class of two
directors shall be elected for a one-year term, one class of two directors shall
be elected for a two-year term, and one class of three directors shall be
elected for a three-year term. Commencing with the annual shareholders' meeting
in 1998 and at each succeeding annual shareholders' meeting, successors to the
class of directors whose terms expire at such annual shareholders' meeting shall
be elected for a three-year term. If the number of directors is changed, any
increase or decrease in directors shall be apportioned among the classes so as
to maintain the number of directors comprising each class as nearly equal as
possible. Any additional directors of a class shall hold office for a term which
will coincide with the remaining term of the other directors of the class.
(b) A director shall hold office until the annual shareholders' meeting for
the year in which his or her term expires and until his or her successor shall
be elected. Directors may be removed only by the holders of at least a majority
of the outstanding Common Stock and only for cause at a meeting called for such
purpose. Except as may otherwise be provided by law, cause for removal shall be
construed to exist only if (i) the director whose removal is proposed has been
convicted of a felony by a court of competent jurisdiction and the conviction is
no longer subject to direct appeal, (ii) the director has been adjudged by a
court of competent jurisdiction to be liable for negligence or misconduct in the
performance of his or her duty to the corporation in a matter of substantial
importance to the corporation, and the adjudication is no longer subject to
direct appeal or (iii) any other situation exists which eighty (80%) of the
other directors, in their sole discretion, agree constitutes cause for removal.
(c) If any vacancy occurs on the Board of Directors or any new directorship
is created by an increase in the authorized number of directors, a majority of
the directors in office, though less than a quorum, may fill the vacancy or fill
the newly created directorship. Any director elected to fill a vacancy shall
have the same term as that of his or her predecessor, or, if such vacancy is a
result of an increase in the number of directors, as that of the other directors
of the class of which he or she shall be a member.
A-1
<PAGE> 31
EXHIBIT B
AMENDMENT TO
1989 EMPLOYEE STOCK PURCHASE PLAN
1. Section 2 of the JumboSports Inc. 1989 Stock Incentive Plan (the "1989
Plan") is amended by increasing the number of shares of the Company's Common
Stock that may be issued under the 1989 Plan from 2,212,212 shares to 3,212,212
shares.
2. This Amendment shall become effective on the date affirmatively approved
by the holders of a majority (not counting abstentions) of shares of the
Company's Common Stock voting in person or by proxy at the Annual Meeting of
Stockholders of the Company to be held on June 4, 1997, if a quorum is then
present.
3. Except as otherwise amended hereby, all other terms and conditions of
the 1989 Plan shall remain in full force and effect.
This Amendment has been adopted by the Board of Directors on March 13,
1997.
B-1
<PAGE> 32
EXHIBIT C
RESOLUTIONS ADOPTED
BY THE BOARD OF DIRECTORS OF
JUMBOSPORTS INC.
I. PURCHASE OF COMMON STOCK BY CERTAIN OFFICERS OF THE CORPORATION
WHEREAS, it is advisable and in the best interest of the Corporation to
facilitate and encourage the purchase of shares of the Corporation's common
stock (the "Common Stock") by certain employees of the Corporation, so as to
increase their stake and ownership interest in the Corporation and align their
interests more closely with those of the Corporation's stockholders.
WHEREAS, in order to facilitate such increased ownership of the Common
Stock, it is desirable that certain employees who held the title of Vice
President as of January 23, 1997, who are more specifically named on Exhibit A
hereto (the "Employees"), be each offered the right to purchase from the
Corporation up to five thousand (5,000) shares of Common Stock, for a total of
up to fifty thousand (50,000) shares for the group, at a purchase price equal to
the closing price of the Company's Common Stock on January 23, 1997, and that
the Corporation lend funds to such Employees, in an amount up to $20,833 per
Employee, for the purchase of such shares of Common Stock in proportion to the
Employee's own investment therein.
WHEREAS, it is the Corporation's intent that such stock sale offer to
Employees remain open for thirty days from the date hereof.
NOW, THEREFORE, BE IT RESOLVED, that each Employee named on EXHIBIT A
hereto be offered the opportunity to purchase up to 5,000 shares of the
Company's Common Stock, up to a total of 50,000 shares for the group of
Employees, at a purchase price equal to $6.25, which is the closing price of the
Common Stock on the New York Stock Exchange on January 23, 1997 (participation
under such terms being referred to as the "V.P. Stock Purchase Program").
BE IT FURTHER RESOLVED, that for each $1.00 that the Employee spends to
purchase Common Stock under the V.P. Stock Purchase Program, the Corporation
will lend the Employee $2.00, up to a maximum of $20,833 per Employee, to
purchase such shares.
BE IT FURTHER RESOLVED, that each such loan shall be represented by a
promissory note, in substantially the same form as EXHIBIT B hereto, providing
for annual payments of interest at a per annum rate equal, at the date such note
is issued, to the most recently published "federal long-term rate" within the
meaning of Section 1274(d)(1)(A) of the Internal Revenue Code, with principal
and all accrued but unpaid interest due on the fifth anniversary date of the
execution and delivery of such note.
BE IT FURTHER RESOLVED, that as a condition to each such sale, each
Employee purchasing shares from the Company must execute and deliver to the
Company a Private Placement Letter, in substantially the form attached hereto as
EXHIBIT C, acknowledging, among other things, their understanding of the
investment they are undertaking, their recognition of the restrictions
applicable to their resale of such shares of Common Stock under the U.S.
securities laws, and that they have been provided with information on the
Corporation and have had the opportunity to ask questions of the Chief Executive
Officer and the Chief Financial Officer of the Corporation.
BE IT FURTHER RESOLVED, that the stock sale offer to Employees pursuant to
the V.P. Stock Purchase Program remain open for thirty days from the date
hereof, ending April 12, 1997.
C-1
<PAGE> 33
II. LISTING OF SHARES ON NEW YORK STOCK EXCHANGE
WHEREAS, it is deemed desirable that the shares of the Common Stock sold to
Employees under the V.P. Stock Purchase Program be listed on the New York Stock
Exchange.
WHEREAS, it is deemed desirable that shares previously sold to other
members of management under similar terms also be listed on the New York Stock
Exchange.
NOW, THEREFORE, BE IT RESOLVED, that all shares of the Common Stock issued
to and purchased by the Corporation's Executive Officers under the terms of
their respective employment agreements, and the shares of Common Stock being
made available for issuance pursuant to the V.P. Stock Purchase Program be
listed on the New York Stock Exchange.
BE IT FURTHER RESOLVED, that the appropriate officers take all necessary
actions to complete the listing of such shares on the New York Stock Exchange.
C-2
<PAGE> 34
EXHIBIT A TO RESOLUTIONS TO BE ADOPTED
BY THE BOARD OF DIRECTORS OF
JUMBOSPORTS INC.
Bill Brehm
Cliff Epstein
Greg Ireton
Jerry Kollar
Susan Jump
Carl Rubin
Michael Noel
Ronald Sarrett
Bill Wisener
Dan Younkman
C-3
<PAGE> 35
APPENDIX
JUMBOSPORTS INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF JUMBOSPORTS,
INC. (THE "COMPANY").
The undersigned hereby constitutes and appoints Stephen Bebis, Jack E.
Bush, Harold Compton, Sam Northrop, Steven A. Raymund and Ronald Vaughn, or
either of them, attorneys, agents and proxies with power of substitution to
vote all of the shares of the Company that the undersigned is entitled to vote
at the Annual Meeting of Stockholders to be held at the Hyatt Regency
Westshore, 6200 Courtney Campbell Causeway, Tampa, Florida 33607, on June 4,
1997 at 10:00 a.m. Eastern Daylight Time, and any adjournment thereof.
This Proxy when properly executed will be voted as directed, or if no
direction is indicated, will be voted "FOR" all of the nominees set forth on
the reverse side for election as Directors and "FOR" each of the additional
proposals. In their discretion the parties are also authorized to vote upon
such other matters as may properly come before the meeting, including the
election of any person to the Board of Directors where a nominee named in the
Proxy Statement is unable to serve or, for good cause, will not serve.
(SEE REVERSE SIDE)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<TABLE>
<S> <C> <C>
Please mark [X]
your votes as
indicated in
this example
1. Election of Directors (INSTRUCTION: To withhold authority to vote for any
FOR all nominees WITHHOLD individual nominee(s) strike a line through the
listed to the right AUTHORITY nominee's name below)
(except as marked to the to vote for all nominees
contrary) listed to the right Stephen Bebis, Jack E. Bush, Harold Compton,
Sam Northrop, Steven A. Raymund, Ronald Vaughn
[ ] [ ]
2. Amendment to Company's Articles of
Incorporation to Classify the Board of
Directors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Amendment to the Company's 1989 Incentive Stock Plan to increase
by 1,000,000 the shares authorized for Issuance under such plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. Ratification of V.P. Stock Purchase
Program
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
The undersigned acknowledges receipt of the Notice of the Annual
Meeting of Stockholders and the Proxy Statement dated April 24,
1997, and ratifies all that the proxies or either of them or their substi-
tutes may lawfully do or cause to be done by virtue hereof and
revokes all former proxies.
Dated: ,1997
---------------------------------------------------------
Signature:
----------------------------------------------------------
- --------------------------------------------------------------------
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. JOINT OWN-
ERS SHOULD EACH SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.
- ------------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
</TABLE>
