SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14 A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- -------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
---------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------------
(3) Filing Party:
---------------------------------------------------------------------
(4) Date Filed:
<PAGE>
JUMBOSPORTS INC.
4701 W. HILLSBOROUGH AVENUE
TAMPA, FL 33614
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 18, 1998
Notice is hereby given that the Annual Meeting of the Stockholders of
JUMBOSPORTS INC. (the "Company") will be held at the JumboSports Training
Center, 15016 N. Dale Mabry Highway, Tampa, Florida 33618 on Thursday, June 18,
1998 at 10:00 a.m. Eastern Daylight Time, for the following purposes:
1. To elect two directors to serve until the next Annual Meeting of
Stockholders and until their successors are duly elected and
qualified.
2. To transact such other business as may properly come before the
meeting.
Only stockholders of record at the close of business on April 24, 1998 are
entitled to notice of and to vote at said meeting or at any adjournments
thereof.
By Order of the Board of Directors,
Jack E. Bush, Chairman of the Board,
President and Chief Executive Officer
April 30, 1998
===============================================================================
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>
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 Thursday, June 18, 1998 at the JumboSports Training
Center, 15016 N. Dale Mabry Highway, Tampa, Florida 33618 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 30, 1998, are first being sent or given to
stockholders on or about April 30, 1998.
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 No. 1. 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 24, 1998, are
entitled to notice of, and to vote at, the Annual Meeting. As of March 27, 1998,
there were 20,392,873 shares of Common Stock outstanding, each of which is
entitled to one vote.
1
<PAGE>
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 27, 1998
(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 Beneficially Percent
Beneficial Owner Position with Company Owned(1) of Class
- ------------------- --------------------- ---------- ------
Directors/Nominees:
- ------------------
<S> <C> <C> <C>
Jack E. Bush Chairman of the Board, 111,000 (2) *
4701 W. Hillsborough Avenue President and Chief
Tampa, Florida Executive Officer
Harold F. Compton Director 21,000 (2) *
14951 North Dallas Parkway
Dallas, Texas
R. Don Morris Director -0- *
P.O. Box 988
Mt. Vernon, Texas
Samuel Northrop, Jr. Director 11,000 (2) *
8140 Mar del Plata
Jacksonville, Florida
Steven A. Raymund (3) Director 26,567 *
5350 Tech Data Drive
Clearwater, Florida
Ronald L. Vaughn Director 11,000 (2) *
401 W. Kennedy Blvd.
Tampa, Florida
Former Executive Officers:
Stephen Bebis --- 50,000 *
16606 Millan de Avila
Tampa, Florida
Robert J. Wittman --- 31,000 *
1378 Wesley Oaks Ct.
Atlanta, Georgia
2
<PAGE>
Shares
Name and Address of Beneficially Percent
Beneficial Owner Position with Company Owned(1) of Class
- ------------------- --------------------- ---------- ------
Other Executive Officers:
Raymond P. Springer Executive Vice President 92,000 (2) *
4701 W. Hillsborough Avenue and Chief Financial Officer
Tampa, Florida
Robert Floum Chief Operating Officer 100,000 (2) *
4701 W. Hillsborough Avenue
Tampa, Florida
Beneficial Owners in
Excess of 5% Ownership:
Investcorp S.A.(4) --- 2,793,914 13.70%
37 rue Notre-Dame
Luxembourg
Dimensional Fund Advisors Inc. (5) --- 1,503,100 7.37%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
ZPR Investment Management Inc. (6) --- 1,367,800 6.71%
1642 N. Volusia Avenue
Orange City, Florida 32763
All current Directors and executive 372,567 1.83%
officers as a group (8 persons)
* Represents less than one percent
<FN>
(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 all stock options which vest or become exercisable within 60 days,
specifically including vested stock options as of April 15, 1998.
(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) As of January 30, 1998, Investcorp S.A. 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 2,793,914 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 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.
(5) As of December 31, 1997, Dimensional Fund Advisors Inc., a registered
investment advisor, is deemed to have beneficial ownership of 1,503,100
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.
(6) As of February 6, 1998.
</FN>
</TABLE>
3
<PAGE>
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. Further, the Board of
Directors is divided into three classes with two Directors elected for a term
expiring at the 1998 Annual Meeting, two expiring in 1999 and two in 2000.
Starting with the 1998 Annual Meeting, one class will be elected each year for a
three year term. The Board of Directors proposes the election of two Directors,
each to hold office for a term of three years 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.
<TABLE>
<CAPTION>
Certain Information Regarding Director Nominees
<S> <C> <C>
Name Age Occupation/Background
- ----- --- ---------------------
Jack E. Bush 63 Chairman of the Board since December 5, 1997, Chief
Executive Officer of the Company since December 16,
1997, and President since February 17, 1998. 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 Artistree Art Frame and Design
Company and Director of Bradlees Stores, Inc. and Stage
Stores Inc. He served as President and Director of
Michaels Stores, Inc.(1991-1995) and 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. Prior to that,
he served in various management capacities at Zayre
Corporation (1980-1985) and J.C. Penney Company
(1958-1980). Mr. Bush is Vice Chairman of 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.
Ronald L. Vaughn 51 Director of the Company since December 1996. Dr. Vaughn
is President of the University of Tampa, a position he
has held since January 1995. Previously, Dr. Vaughn
served as Dean of the College of Business and Dean of
Graduate Studies. Dr. 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.
</TABLE>
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.
4
<PAGE>
OTHER DIRECTORS NOT UP FOR RE-ELECTION IN 1998
In addition to the Director nominees set forth in Proposal No. 1, the
following are individuals currently serving on the Board, categorized by term.
<TABLE>
<CAPTION>
Terms Expiring in 1999
- ----------------------
<S> <C> <C>
Name Age Occupation/Background
- ----- --- ---------------------
Harold F. Compton 50 Director of the Company since December 1996. Mr.
Compton is President and Chief Operating Officer of
CompUSA Inc., America's largest computer superstore
retailer, which he joined in 1994 as Executive Vice
President/Operations. Prior to that, he served as
President and Chief Operating Officer of Central
Electric, Inc. (1993-1994). He has also served as
Executive Vice President/Operations and Human
Resources of Home Base (1989-1993), Senior Vice
President/Operations and Director of Stores for
Roses Discount Department Stores (1986-1989), and
in various management capacities at Zayre
Corporation (1965-1986).
Samuel Northrop, Jr. 66 Director of the Company since August 1996. Mr. Northrop
retired in July 1996 as Director of Commercial Banking
of Barnett Banks, Inc., a position he held since 1991.
He joined Barnett in November 1986 as Senior Vice
President and Manager of the U.S. Banking Group. While
at Barnett, he was also a member of the Corporate Loan
Committee and the Management Advisory Council. Prior
to that, he served in various management capacities
at Wachovia Bank N.A., leaving in 1986 as Group Vice
President, Southeast Corporate Banking Group.
Terms Expiring in 2000
- ----------------------
R. Don Morris 58 Director of the Company since March 1998. Mr. Morris
retired as Executive Vice President/Chief Financial
Officer of Michaels Stores, Inc. in March 1997. Prior
to 1990, when he joined Michaels Stores, he was
Director, President and Chief Executive Officer of
Frostcollection, Inc. (1988-1990). He also served
in various capacities at Arthur Young & Company in
Dallas, Texas (1962 - 1988).
Steven A. Raymund 42 Director of the Company since March 1993. Mr. Raymund
is Chairman and Chief Executive Officer of Tech Data
Corporation, a leading international distributor of
technology products. He has held the position of
Chief Executive Officer since 1986 and has served as
Chairman of the Board since 1991. Previously, he
served as Chief Operating Officer. He is also a
Director of Jabil Circuit, Inc.
</TABLE>
5
<PAGE>
ADDITIONAL INFORMATION CONCERNING DIRECTORS
Directors Fees
Directors 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.
Additionally, the Chairman is paid an annual fee of $48,000 and $1,500 for
attendance 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, six 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 and Compensation Committees. The Company
does not have a standing Executive Committee or Nominating Committee.
The Audit Committee met twice during the last fiscal year. The Audit
Committee currently consists of Samuel Northrop, Jr., Ronald L. 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 Steven A. Raymund and Harold F.
Compton. The Compensation Committee reviews and approves executive compensation
and administers and makes recommendations concerning all of the Company's
compensation-related plans.
Management Changes
In July 1997, Mr. Robert J. Wittman, Executive Vice President/Chief
Merchandising Officer, left the employ of the Company. In December 1997, Mr.
Stephen Bebis resigned as Chairman of the Board, Chief Executive Officer and
President of the Company. At approximately the same time, Mr. Jack E. Bush was
elected to the position of Chairman of the Board and appointed Acting Chief
Executive Officer of the Company. Mr. Bush assumed the title of Chairman and
Chief Executive Officer in January 1998 and President on February 17, 1998. Mr.
Robert Floum was elected to the position of Chief Operating Officer in January
1998 and began serving on January 26, 1998.
6
<PAGE>
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>
<S> <C> <C>
Name Age Position, Principal Occupation and Other Directorships
- ----- --- ------------------------------------------------------
Jack E. Bush 63 Chairman of the Board since December 5, 1997, Chief
Executive Officer of the Company since December 16,
1997, and President since February 17, 1998. 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 Artistree Art Frame and Design
Company and Director of Bradlees Stores, Inc. and Stage
Stores Inc. He served as President and Director of
Michaels Stores, Inc. (1991-1995) and Executive Vice
President, Director of Operations and Stores for Ames
Department Stores, Inc. (1990-1991). From 1985 - 1990,
Mr. Bush was with Roses Discount Department Stores, last
serving as President and Director. Prior to that, he
served in various management capacities at Zayre
Corporation (1980-1985) and J.C. Penney Company (1958-1980).
Mr. Bush is Vice Chairman of 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.
Raymond P. Springer 47 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 Floum 61 Chief Operating Officer of the Company since January
1998. From 1994-1998, Mr. Floum served as a consultant
for a number of Florida-based retailers. Prior to
retail consulting, he served as President and Chief
Executive Officer of Fisher Big Wheel in New Castle,
Pennsylvania, and Senior Vice President of Merchandising
of Roses Discount Stores in Henderson, North Carolina.
</TABLE>
7
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth, for the years ended January 30, 1998,
January 31, 1997, and January 28, 1996, 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 and most highly compensated senior vice presidents ("Named Officers").
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation Awards
------------------------------------- ---------------------------------
Other Annual Restricted Stock All other
Name and Principal Position Year Salary Bonus Compensation Stock Awards Options (#) comp. (1)
- --------------------------- ---- ------ ----- ------------ ------------ ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Jack E. Bush 1997 $ 69,479 (2) $ -0- $ -0- $ -0- 211,000 $ -0-
Chairman, President and 1996 N/A (3) N/A N/A N/A N/A N/A
Chief Executive Officer 1995 N/A (3) N/A N/A N/A N/A N/A
Raymond P. Springer 1997 $208,063 $ 17,308 (4) $ -0- $ -0- 30,000 $24,980
Executive Vice President 1996 145,385 $ 72,692 (4) -0- -0- 150,000 1,954
Chief Financial Officer 1995 N/A (5) N/A N/A N/A N/A N/A
Clifford Epstein 1997 $122,308 $ 20,000 $ 27,849 (6) $ -0- 21,200 $ 5,693
Senior Vice President 1996 113,106 1,569 -0- -0- 25,000 215
Chief Merchandising Officer 1995 N/A (5) N/A N/A N/A N/A N/A
Michael Henning 1997 $133,492 $ 4,207 (4) $ -0- $ -0- 20,000 $11,255
Senior Vice President 1996 108,173 27,043 (4) -0- -0- 100,000 5,126
Human Resources 1995 N/A (5) N/A N/A N/A N/A N/A
Michael B. McCaghren 1997 $110,289 $ -0- $ -0- $ -0- 20,000 $ 312
Senior Vice President 1996 N/A (5) N/A N/A N/A N/A N/A
Chief Information Officer 1995 N/A N/A N/A N/A N/A N/A
Stephen Bebis 1997 $290,337 (7) $162,231 (4) $500,000 (8) $ -0- 50,000 $ 9,183
Former Chairman, President 1996 290,769 193,846 (4) 30,361 (6) 218,750 (9) 300,000 4,063
Chief Executive Officer 1995 N/A (10) N/A N/A N/A N/A N/A
Robert J. Wittman 1997 $113,462 (11)$ 64,615 (4) $ 12,897 (6) $ -0- 40,000 $10,901
Former Executive Vice 1996 207,692 138,461 (4) 157,997 (6) -0- 240,000 1,969
President and Chief 1995 N/A (5) N/A N/A N/A N/A N/A
Merchandising Officer
<FN>
(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 amounts paid directly to Mr. Bush and to Raintree Partners,
Inc., Mr. Bush's management consulting firm
(3) Mr. Bush joined the Company in January 1998 and accordingly, received
no compensation from the Company prior to that date.
(4) Represents a portion of the Named Officer's minimum guaranteed bonus,
pursuant to the terms of the Named Officer's employment agreement.
(5) Mr. Wittman, Mr. Henning, Mr. Springer, Mr. Epstein and Mr. McCaghren
joined the Company in March 1996, March 1996, April 1996, June 1996
and February 1997, respectively, and accordingly, received no
compensation from the Company prior to those dates.
(6) Represents amounts paid to the Named Officer in connection with
relocation expenses.
(7) Mr. Bebis resigned as President and Chief Executive Officer in
December 1997
(8) Represents amount paid to Mr. Bebis upon resignation
(9) 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.
(10) Mr. Bebis joined the Company in February 1996 and accordingly,
received no compensation from the Company prior to that date.
(11) Mr. Wittman resigned from the Company's employ in July 1997.
</FN>
</TABLE>
8
<PAGE>
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>
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation for
Individual Grants Option Term (1)
-------------------------------------------- ---------------
% of Total
Options
Granted to
Options Employees Exercise or
Granted In Fiscal Base Price Expiration
Name (#) Year (2) ($/share)(3) Date 5% 10%
- ---- ----------- -------- ----------- ---------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Jack E. Bush 1,000 (4) * 1.813 (5) 6/3/07 1,140 2,889
" 10,000 (4) * 1.813 (5) 6/4/07 11,400 28,890
" 200,000 (6) 17.50% 1.125 1/16/08 141,600 358,600
Raymond P. Springer 30,000 (7) 2.62% 1.813 (5) 4/17/07 34,260 86,820
Clifford Epstein 20,000 (8) 1.75% 1.813 (5) 9/22/07 22,800 57,780
" 1,200 (8) * 1.813 (5) 4/21/07 1,368 3,467
Michael Henning 20,000 (7) 1.75% 1.813 (5) 3/25/07 22,800 57,780
Michael B. McCaghren 20,000 (8) 1.75% 1.813 (5) 2/24/07 22,800 57,780
Stephen Bebis 50,000 (7) 4.36% 6.125 12/5/97 N/A (9) N/A (9)
Robert J. Wittman 40,000 (7) 3.49% 6.000 10/5/97 N/A (9) N/A (9)
<FN>
(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) 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 555,000 option grants were made under the 1989 Stock Incentive
Plan and 590,700 option grants were made under the 1996 Stock Incentive
Plan.
(3) 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.
(4) These options were granted to Mr. Bush as compensation for his initial
appointment to the Board and his annual grant as a Director of the
Company.
(5) These options, though originally granted at market value at the date of
grant, were repriced on February 17, 1998, to the closing price of the
Company's Common Stock on the New York Stock Exchange on that date -
$1.813. Accordingly, the price reflected here shows the effect of the
repricing.
(6) Of these options granted in 1997 to Mr. Bush, 100,000 options vested
upon the date of grant, 50,000 options vest in six months and the
remaining 50,000 options vest in one year from the date of grant.
(7) All options granted in 1997 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.
(8) All options granted in 1997 to the Named Officer vest over four years
at the rate of 25% each year on the anniversary of the date of grant.
(9) The Named Officers left the Company's employ during fiscal 1997. In
connection with their departure from the Company, their options were
forfeited or expired, as applicable.
* Represents less than 1%.
</FN>
</TABLE>
9
<PAGE>
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 1997 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 In-the-Money Options At
Shares Fiscal Year End (#) Fiscal Year End (1)
Acquired on Value ------------------------- -------------------------
Name Exercise (#) Realized Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ------------ -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Jack E. Bush -0- -0- 100,000/111,000 $62,500/$62,500
Raymond P. Springer -0- -0- 0/180,000 0/0(2)
Clifford Epstein -0- -0- 0/46,200 0/0(2)
Michael Henning -0- -0- 0/120,000 0/0(2)
Michael B. McCaghren -0- -0- 0/20,000 0/0(2)
Stephen Bebis (3) -0- -0- 0/0 0/0
Robert J. Wittman (3) -0- -0- 0/0 0/0
<FN>
(1) Represents the difference between the closing price of the Company's
Common Stock at the end of fiscal year 1997 ($1.75) and the exercise
price of the options.
(2) No options for the indicated officers were in the money.
(3) All outstanding options for the named officers were canceled upon
their separation from the Company.
</FN>
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION
During the fiscal year ended January 30, 1998, Messrs. Compton and Raymund
served on the Compensation Committee. Neither 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.
10
<PAGE>
PERFORMANCE GRAPH
CUMULATIVE TOTAL RETURN COMPARISON
Among JumboSports Inc., S&P Midcap 400 Index and S&P Retail-Specialty Index
The following line graph compares the cumulative total stockholder return
on the Company's Common Stock from January 29, 1993 through January 30, 1998,
with the cumulative total return on the Standard & Poor's Midcap 400 Index and
the Standard & Poor's Retail - Specialty Index for the same period, assuming
reinvestment of dividends. In accordance with the rules of the Securities and
Exchange Commission, the returns are indexed to a value of $100 at January 29,
1993.
[GRAPH}
Measurement Period S&P Midcap 440 S&P Retail-Specialty
(Fiscal Year Covered) JumboSports Inc. Index Index
1/29/93 100 100 100
1/28/94 119 112 103
1/27/95 154 87 71
1/28/96 38 134 63
1/31/97 47 160 58
1/30/98 12 197 62
11
<PAGE>
COMPENSATION COMMITTEE REPORT
General. The Compensation Committee (the "Committee") currently consists of
Harold F. Compton and Steven A. Raymund, 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. In setting the Named Executive Officers'
compensation for 1997, the Committee was bound by certain terms of the
employment agreements negotiated at arm's length between the Company and each
such officer in 1996, at which time such employment agreements were approved by
the Compensation Committee. Any salary increases under those employment
agreements were determined by the Committee after taking into consideration the
Company's needs and the Named Executive Officer's performance.
The Company's general compensation philosophy aims to provide base
compensation comparable with similar businesses, allowing the Company to attract
and retain qualified employees, and to provide incentive compensation which will
relate to the individual's performance and will also vary directly with the
Company's performance. 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. The Committee believes
this philosophy 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 not deductible for tax purposes. It is the
responsibility of the Committee to determine whether any actions with respect to
this compensation limit should be taken by the Company. During fiscal year 1997,
no 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 1998. Therefore, the Committee has not taken any
action to date to comply with this limit. The Committee will continue to monitor
this situation and will take appropriate action if it is warranted in the
future.
Base Compensation. In 1996 the Company's Compensation Committee approved an
Employment Agreement with Mr. Stephen Bebis, which was negotiated at arm's
length, providing for a three-year contract with a minimum base salary of
$300,000, and a guaranteed bonus for fiscal year 1996. In setting the Chief
Executive Officer's base salary for fiscal year 1997, the Committee reviewed the
Company's needs and the various initiatives undertaken by Mr. Bebis to address
those needs, and approved an increase in Mr. Bebis' annual salary to $337,500.
Similarly, the Committee approved salary increases for Messrs. Wittman and
Springer. Messrs. Wittman and Bebis terminated their employment with the Company
in July and December 1997, respectively. In December 1997, following Mr. Bebis's
departure as Chairman of the Board, President and Chief Executive Officer of the
Company, the Board of Directors appointed Mr. Springer President and Chief
Operating Officer of the Company, pending the Company's identification of
suitable replacements for Messrs. Wittman and Bebis. In light of these increased
management duties, the Board approved a permanent base salary increase for Mr.
Springer to $240,000, and a temporary annualized base salary increase to
$308,000 while he served in the capacities of President and Chief Operating
Officer. On December 5, 1997, the Board elected Mr. Jack E. Bush as Chairman of
the Board and requested his services as Acting Chief Executive Officer of the
Company, until a suitable candidate was identified for that position. On January
16, 1998, after considering various candidates, the Board asked Mr. Bush to
remain as Chief Executive Officer of the Company and elected him to this
position. Mr. Bush has entered into a consulting agreement with the Company,
pursuant to which he will serve in such capacities and receive a base annual
compensation of $300,000 plus stock options. The terms of the consulting
agreement were approved by the full Board of Directors. In addition, Mr. Bush
receives an annual fee of $48,000 for his services as Chairman of the Board. The
Company recently retained Mr. Robert Floum as Chief Operating Officer, and the
full Board of Directors approved a base salary for Mr. Floum of $300,000.
12
<PAGE>
Annual Performance Incentives. No performance bonuses for 1997 were paid to
any of the Company's Named Executive Officers. In fiscal 1996, the Company
established a Management Cash Bonus Program (the "Bonus Program") which replaced
the previously existing cash bonus program. The 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 Senior
Vice President of Human Resources. The Bonus Program provides cash payouts of up
to 50% of the base salary for Store Mangers 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 1997, except for Messrs. Bush and Floum, were pursuant
to the terms of their respective employment agreements and are set forth on the
Summary Compensation Table on page 8 of the Proxy Statement for the 1998 Annual
Meeting of Stockholders. 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
four years at the rate of 40% after two years from the date of grant and 20% at
the end of each subsequent year. Pursuant to the terms of his consulting
agreement with the Company, Mr. Bush received options to purchase 200,000 shares
of the Company's Common Stock, at an exercise price equal to closing price of
the Company's shares on the New York Stock Exchange on the day Mr. Bush began
serving the Company as Chief Executive Officer. These options vest as follows:
options to purchase 100,000 shares vested immediately upon grant, with options
to purchase an additional 50,000 shares vesting on July 16, 1998, and the
balance of options to purchase another 50,000 shares vesting on January 16,
1999. Mr. Floum also received options to purchase 200,000 shares of the
Company's Common Stock pursuant to the terms of his employment agreement, with a
vesting schedule similar to that applicable to Mr. Bush's options. 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.
Since the value of the Company's Common Stock has been depressed for a
sustained period of time, the Board considered that a substantial portion of the
outstanding stock options previously granted under the Incentive Plans were of
little value to the Company's employees. To promote loyalty among the Company's
employees and improve morale, the Board deemed it to be in the best interests of
the Company to adopt a repricing of all outstanding stock options. Accordingly,
on February 17, 1998, the Board approved a repricing of all outstanding stock
options so that the exercise price would equal the closing price of the
Company's stock on the New York Stock Exchange on that date.
Other Benefits. The benefit package 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-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.
1997 Compensation to Mr. Bebis. Effective December 5, 1997, Mr. Bebis
terminated his employment as President and Chief Executive Officer of the
Company and, pursuant to the terms of a Separation Agreement, received $500,000
as a lump sum severance payment and immediate vesting for 50,000 shares of
restricted stock previously awarded to him. All stock options held by Mr. Bebis
at the time were canceled.
COMPENSATION COMMITTEE
Harold F. Compton
Steven A. Raymund
13
<PAGE>
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
judgment.
INDEPENDENT PUBLIC ACCOUNTANTS
Coopers & Lybrand L.L.P. ("Coopers & Lybrand") served as the accountants
for the fiscal year ended January 30, 1998, and the Board of Directors has
reappointed them to act as the public accountants for the fiscal year ending
January 29, 1999. 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
In connection with their respective employment agreements, and pursuant to
the terms thereof, during fiscal year 1996 the Company loaned $166,667, $137,500
and $30,250 to each of Messrs. Bebis, Springer and Henning, respectively, to
assist them with the purchase of shares of the Company's Common Stock. Such
loans are repayable in full, principal and interest, at maturity five years from
the date of each such loan, and bear interest per annum at the Federal Long-Term
Rate. As of January 30, 1998, the outstanding balances, including interest, on
these loans were $184,750, $152,827 and $33,267 for Messrs. Bebis, Springer and
Henning, respectively.
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 1997 and Form 5
and amendments thereto furnished to the Company with respect to fiscal year 1997
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 30, 1998 have been
fulfilled and that all such filings were made on a timely basis.
STOCKHOLDERS' PROPOSALS FOR 1999 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 1999 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, 1998.
14
<PAGE>
LISTING OF STOCKHOLDERS
A complete list of the stockholders entitled to vote at the Annual Meeting
of the Stockholders, to be held on June 18, 1998, 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 30, 1998,
is being mailed with this Proxy Statement but is not to be considered a part
hereof.
REQUESTS FOR ADDITIONAL INFORMATION
A copy of the Company's annual report on Form 10-K for the year ended
January 30, 1998, 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,
Jack E. Bush
Chairman of the Board, President
and Chief Executive Officer
Tampa, Florida
15
