<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 (AMENDMENT NO. )
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>
Books-A-Million, 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
May 1, 2000
Dear Stockholder:
You are cordially invited to attend the 2000 Annual Meeting of
Stockholders of Books-A-Million, Inc., which will be held at 10:00 a.m. on
Tuesday, June 6, 2000 at The Harbert Center, 2019 Fourth Avenue North,
Birmingham, Alabama 35203.
The principal business of the meeting will be (i) to elect a class of
directors to serve a three-year term expiring in 2003 and (ii) to ratify the
appointment by the Audit Committee of the Board of Directors of Arthur Andersen
LLP to serve as the Company's independent auditor for the fiscal year ending
February 3, 2001. During the meeting, we will also review the results of the
past fiscal year and report on significant aspects of our operations during the
first quarter of fiscal 2001.
Whether or not you plan to attend the Annual Meeting, please complete,
sign, date and return the enclosed proxy card in the postage-prepaid envelope
provided so that your shares will be voted at the meeting. If you decide to
attend the meeting, you may, of course, revoke your proxy and personally cast
your votes.
Sincerely yours,
Clyde B. Anderson
Chairman and Chief Executive Officer
<PAGE> 3
BOOKS-A-MILLION, INC.
402 INDUSTRIAL LANE
BIRMINGHAM, ALABAMA 35211
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
You are cordially invited to attend the 2000 Annual Meeting of
Stockholders of Books-A-Million, Inc., which will be held at 10:00 a.m. on
Tuesday, June 6, 2000 at The Harbert Center, 2019 Fourth Avenue North,
Birmingham, Alabama 35203. The meeting is called for the following purposes:
(1) To elect a class of directors for a three-year term expiring
in 2003;
(2) To ratify the appointment by the Audit Committee of the Board
of Directors of Arthur Andersen LLP to serve as the Company's
independent auditor for the fiscal year ending February 3,
2001; and
(3) To transact such other business as may properly come before
the meeting.
The Board of Directors has fixed the close of business on April 17,
2000 as the record date for the purpose of determining the stockholders who are
entitled to notice of and to vote at the meeting and any adjournment or
postponement thereof.
By Order of the Board of Directors,
Sandra B. Cochran
President and Secretary
May 1, 2000
Birmingham, Alabama
IF YOU ARE UNABLE TO BE PRESENT AT THE MEETING, YOU ARE REQUESTED TO
COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD SO THAT YOUR SHARES WILL
BE REPRESENTED.
<PAGE> 4
BOOKS-A-MILLION, INC.
402 INDUSTRIAL LANE
BIRMINGHAM, ALABAMA 35211
PROXY STATEMENT
This Proxy Statement is furnished by and on behalf of the Board of
Directors of Books-A-Million, Inc. (the "Company") in connection with the
solicitation of proxies for use at the Annual Meeting of Stockholders of the
Company to be held at 10:00 a.m. on Tuesday, June 6, 2000 at The Harbert Center,
2019 Fourth Avenue North, Birmingham, Alabama 35203 and at any adjournments or
postponements thereof (the "Annual Meeting"). This Proxy Statement and the
enclosed proxy card will be first mailed on or about May 1, 2000 to the
Company's stockholders of record on the Record Date, as defined below.
THE BOARD OF DIRECTORS URGES YOU TO COMPLETE, SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD IN THE POSTAGE-PREPAID ENVELOPE PROVIDED.
SHARES ENTITLED TO VOTE
Proxies will be voted as specified by the stockholder or stockholders
granting the proxy. Unless contrary instructions are specified, if the enclosed
proxy card is executed and returned (and not revoked) prior to the Annual
Meeting, the shares of common stock, $.01 par value per share (the "Common
Stock"), of the Company represented thereby will be voted (i) FOR the election
as directors of the nominees listed in this Proxy Statement and (ii) FOR
ratification of the appointment by the Audit Committee of the Board of Directors
of Arthur Andersen LLP to serve as the Company's independent auditor for the
Company's fiscal year ending February 3, 2001 ("fiscal 2001"). The submission of
a signed proxy will not affect a stockholder's right to attend and to vote in
person at the Annual Meeting. A stockholder who executes a proxy may revoke it
at any time before it is voted by filing with the Secretary of the Company
either a written revocation or an executed proxy bearing a later date or by
attending and voting in person at the Annual Meeting.
Only holders of record of Common Stock as of the close of business on
April 17, 2000 (the "Record Date") will be entitled to vote at the Annual
Meeting. As of the close of business on the Record Date, there were 18,091,815
shares of Common Stock (the "Shares") outstanding. Holders of Shares authorized
to vote are entitled to cast one vote per Share on all matters. The holders of a
majority of the Shares entitled to vote must be present or represented by proxy
to constitute a quorum. Shares as to which authority to vote is withheld and
abstentions are counted in determining whether a quorum exists.
Under Delaware law, directors are elected by the affirmative vote, in
person or by proxy, of a plurality of the shares entitled to vote in the
election at a meeting at which a quorum is present. Only votes actually cast
will be counted for the purpose of determining whether a particular nominee
received more votes than the persons, if any, nominated for the same seat on the
Board of Directors.
<PAGE> 5
Approval of the proposal to ratify the appointment of Arthur Andersen
LLP as the Company's independent auditor for fiscal 2001 and any other matters
that may properly come before the Annual Meeting, requires the affirmative vote
of a majority of the Shares represented in person or by proxy and entitled to
vote on such matter at a meeting at which a quorum is present. Abstentions will
be counted in determining the minimum number of votes required for approval and
will, therefore, have the effect of votes against such proposal. Broker
non-votes, meaning those Shares held by a broker or nominee as to which such
broker or nominee does not have discretionary voting power, will not be counted
as votes for or against approval of such matters.
With respect to any other matters that may come before the Annual
Meeting, if proxies are executed and returned, such proxies will be voted in a
manner deemed by the proxy representatives named therein to be in the best
interests of the Company and its stockholders.
PROPOSAL I - ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into three classes of
directors serving staggered terms of office. Upon the expiration of the term of
office of a class of directors, the nominee or nominees for that class are
elected for a term of three years to serve until the election and qualification
of their successors. The current term of Mr. Clyde B. Anderson and Mr. Ronald G.
Bruno expires upon the election and qualification of the directors to be elected
at this Annual Meeting. The Board of Directors has nominated Mr. Anderson and
Mr. Bruno for re-election to the Board of Directors at the Annual Meeting, to
serve until the 2003 annual meeting of stockholders and until their successors
are duly elected and qualified.
All Shares represented by properly executed proxies received in
response to this solicitation will be voted for the election of the directors as
specified therein by the stockholders. Unless otherwise specified in the proxy,
it is the intention of the persons named on the enclosed proxy card to vote FOR
the election of Mr. Clyde B. Anderson and Mr. Ronald G. Bruno to the Board of
Directors. Mr. Anderson and Mr. Bruno have each consented to serve as a director
of the Company if elected. If at the time of the Annual Meeting either Mr.
Anderson or Mr. Bruno is unable or declines to serve as a director, the
discretionary authority provided in the enclosed proxy card will be exercised to
vote for a substitute candidate designated by the Board of Directors. The Board
of Directors has no reason to believe that either Mr. Anderson or Mr. Bruno will
be unable or will decline to serve as a director.
Stockholders may withhold their votes from a nominee by so indicating
in the space provided on the enclosed proxy card.
Set forth below is certain information furnished to the Company by Mr.
Clyde B. Anderson and Mr. Ronald G. Bruno and by each of the incumbent directors
whose terms will continue following the Annual Meeting.
-2-
<PAGE> 6
NOMINEES FOR ELECTION - TERM EXPIRING 2003
CLYDE B. ANDERSON
Age: 39
Clyde B. Anderson has served as a director of the Company since August
1987. Mr. Anderson has served as the Chairman of the Board of the Company since
January 2000 and the Chief Executive Officer of the Company since July 1992. Mr.
Anderson served as the President of the Company from November 1987 to August
1999. From November 1987 to March 1994, Mr. Anderson also served as the
Company's Chief Operating Officer. Mr. Anderson serves on the Board of Directors
and the Compensation Committee of Hibbett Sporting Goods, Inc., a sporting goods
retailer. Mr. Anderson is the son of Charles C. Anderson and the brother of
Terry C. Anderson, both members of the Company's Board of Directors.
RONALD G. BRUNO
Age: 48
Ronald G. Bruno has served as the President of Bruno Capital Management
Corporation, an investment company, since September 1995 and has served as a
director of the Company since September 1992. Formerly, Mr. Bruno served as the
Chairman and Chief Executive Officer of Bruno's, Inc., a supermarket retailing
chain, for over five years. Mr. Bruno is a director of Bruno's, Inc., Russell
Corporation, a sports apparel manufacturing company, and Southtrust Bank of
Alabama, N.A.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
FOR THE ELECTION AS DIRECTOR OF THE NOMINEES NAMED ABOVE.
INCUMBENT DIRECTORS - TERM EXPIRING 2001
CHARLES C. ANDERSON
Age: 65
Charles C. Anderson served as the Chairman of the Board of the Company
for more than 28 years and retired as Chairman in January 2000. He also served
as the Chief Executive Officer of the Company from 1964 to July 1992. Mr.
Anderson is the father of Clyde B. Anderson, the Company's Chief Executive
Officer and Chairman of the Board of Directors, and Terry C. Anderson, a member
of the Company's Board of Directors.
-3-
<PAGE> 7
J. BARRY MASON
Age: 59
J. Barry Mason has served as a director of the Company since April 14,
1998. Dr. Mason has held the positions of Dean and Thomas D. Russell Professor
of Business at Culverhouse College of Commerce, The University of Alabama since
1988.
INCUMBENT DIRECTOR - TERM EXPIRING 2002
TERRY C. ANDERSON
Age: 42
Terry C. Anderson has served as a director of the Company since April
14, 1998. Mr. Anderson serves as the President and Chief Executive Officer of
American Promotional Events, Inc., an importer and wholesaler of pyrotechnics,
since July 31, 1988. Mr. Anderson is the son of Charles C. Anderson, a member of
Company's Board of Directors, and the brother of Clyde B. Anderson, the
Company's Chief Executive Officer and Chairman of the Company's Board of
Directors.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Company's Board of Directors held nine meetings during the
Company's fiscal year ended January 29, 2000 ("fiscal 2000"). The Board has an
Executive Committee, an Audit Committee and a Compensation Committee, but does
not have a Nominating Committee. Each director attended at least 75 percent of
(i) the aggregate of the total number of meetings of the Board of Directors and
(ii) the total number of meetings held by all committees of the Board on which
he served.
Committees of the Board of Directors. The Executive Committee consists
of Messrs. Charles C. Anderson, Chairman of the Committee, Clyde B. Anderson and
Ronald G. Bruno. The Executive Committee is authorized to exercise all of the
power and authority of the Board of Directors in the management of the business
and affairs of the Company, including, without limitation, the power and
authority to declare a dividend, to authorize the issuance of stock and to adopt
a certificate of ownership and merger pursuant to Section 253 of the Delaware
General Corporation Law. The authority of the Executive Committee does not
extend to certain fundamental corporate transactions. The Executive Committee
does not hold regularly scheduled meetings but meets when necessary. The
Executive Committee did not hold any meetings in fiscal 2000.
The Audit Committee consists of Messrs. J. Barry Mason, Chairman of the
Committee, and Ronald G. Bruno. The responsibilities of the Audit Committee
include, in addition to such other duties as the Board may specify, recommending
independent auditors, reviewing with the independent auditors the scope and
results of the audit engagement, monitoring the Company's financial policies and
control procedures and reviewing and monitoring the provision of non-audit
services by the Company's auditors. The Audit Committee held two meetings in
fiscal 2000.
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<PAGE> 8
The Compensation Committee consists of Messrs. Ronald G. Bruno,
Chairman of the Committee and J. Barry Mason. The responsibilities of the
Compensation Committee include, in addition to such other duties as the Board
may specify, establishing salaries, bonuses and other compensation for the
Company's executive officers and administering the Company's Stock Option Plan,
Employee Stock Purchase Plan and Executive Incentive Plan. The Compensation
Committee held two meetings in fiscal 2000.
Compensation of Directors. Prior to March 15, 2000 directors who were
not employees of the Company ("Non Employee Directors") received an annual
retainer fee of $10,000 and an attendance fee of $500 for each Board and
committee meeting attended, as well as reimbursement of all out-of-pocket
expenses incurred in attending all such meetings. After March 15, 2000, pursuant
to a resolution of the Board of Directors, Non Employee Directors will receive
an annual retainer fee of $15,000 and an attendance fee of $1,000 for each Board
and committee meeting attended, whether in person or telephonic. Such directors
will continue to receive reimbursement of all out-of-pocket expenses incurred in
attending all such meetings. In addition, the Company's non-employee directors
are eligible to receive formula grants of stock options under the Company's
Stock Option Plan.
Under the Company's Stock Option Plan, each director who is not an
employee of the Company or its subsidiary shall, on the first day he serves as a
director, be automatically granted options to purchase 10,000 shares of Common
Stock from the Company at the "fair market value" (as defined in the Stock
Option Plan) of such Common Stock on such date. Further, each such director who
is serving as a director on the last business day of each calendar year and who
has served as a director for more than one year shall automatically be granted
options to purchase 6,000 shares of Common Stock from the Company at the fair
market value of the Common Stock on such date. Each of these options are
immediately exercisable and currently expire on the earlier of the sixth
anniversary of the date of grant or 90 days after such individual ceases to be a
director of the Company. Accordingly, each of Messrs. Terry C. Anderson, Ronald
G. Bruno and J. Barry Mason received a grant of options to purchase 6,000 shares
of Common Stock at an exercise price of $8.31 per share on December 31, 1999.
Compliance with Section 16(a) of the Securities Exchange Act of 1934.
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors, executive officers and persons who own
beneficially more than 10% of the Company's Common Stock to file reports of
ownership and changes in ownership of such stock with the Securities and
Exchange Commission (the "SEC") and the Nasdaq Stock Market, Inc. Directors,
executive officers and greater than 10% stockholders are required by SEC
regulations to furnish the Company with copies of all such forms they file. To
the Company's knowledge, based solely on a review of the copies of such reports
furnished to the Company and written representations that no other reports were
required, its directors, executive officers and greater than 10% stockholders
complied during fiscal 2000 with all applicable Section 16(a) filing
requirements.
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<PAGE> 9
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information concerning the beneficial
ownership of Common Stock of the Company of (i) those persons known by
management of the Company to own beneficially more than 5% of the Company's
outstanding Common Stock, (ii) the directors of the Company, (iii) the executive
officers named in the Summary Compensation Table included elsewhere herein and
(iv) all current directors and executive officers as a group. Such information
is provided as of April 11, 2000. According to rules adopted by the SEC, a
person is the "beneficial owner" of securities if he or she has or shares the
power to vote them or to direct their investment or has the right to acquire
beneficial ownership of such securities within 60 days through the exercise of
an option, warrant, right of conversion of a security or otherwise. Except as
otherwise noted, the indicated owners have sole voting and investment power with
respect to shares beneficially owned. An asterisk in the percent of class column
indicates beneficial ownership of less than 1% percent of the outstanding Common
Stock.
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name of Beneficial Owner Beneficial Ownership Class
- ------------------------ -------------------- -----
<S> <C> <C>
Charles C. Anderson(1) 2,763,398(2) 15.3%
Joel R. Anderson(1) 1,782,440(3) 9.9
Clyde B. Anderson(4) 1,655,800(5) 9.2
Dimensional Fund Advisors, Inc.(6) 1,088,700 6.0
Terry C. Anderson 447,272(7) 2.5
Sandra B. Cochran 72,000(8) *
Terrance G. Finley 53,490(9) *
Ronald G. Bruno 26,000(10) *
J. Barry Mason 22,000(11) *
Richard S. Wallington 7,980(12) *
All current directors and executive
officers as a group (8 persons) 4,964,940(13) 27.4%
</TABLE>
- -----------------
(1) The business address of Mr. Charles C. Anderson and Mr. Joel R.
Anderson is 202 North Court Street, Florence, Alabama 35630. Mr.
Charles C. Anderson serves on the Company's Board of Directors. His
brother, Mr. Joel R. Anderson, does not serve as an officer or director
of the Company.
(2) Includes 285,925 shares held in the Ashley Anderson Trust, as to which
Mr. Anderson, as co-trustee, shares voting and investment power. This
number of shares also includes 83,000 shares held by a charitable
foundation of which Mr. Charles C. Anderson is the Chairman of the
Board of Directors, and 57,000 shares subject to options exercisable on
or before June 10, 2000.
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<PAGE> 10
(3) Includes 83,000 shares held by a charitable foundation of which Mr.
Joel R. Anderson is the Chairman of the Board of Directors.
(4) Mr. Clyde B. Anderson's business address is 402 Industrial Lane,
Birmingham, Alabama 35211.
(5) Includes 83,000 shares and 50,000 shares held by charitable foundations
of which Mr. Clyde B. Anderson is a member of the Board of Directors
and the Chairman of the Board of Directors, respectively. This number
also includes 99,000 shares subject to options exercisable on or before
June 10, 2000.
(6) Dimensional Fund Advisors, Inc. is an investment advisor to a group of
four investment companies. Its business address is 1299 Ocean Avenue,
11th Floor, Santa Monica, California 90401.
(7) Includes 12,000 shares subject to options exercisable on or before June
10, 2000.
(8) Includes 70,000 shares subject to options exercisable on or before June
10, 2000.
(9) Includes 52,200 shares subject to options exercisable on or before June
10, 2000.
(10) Includes 24,000 shares subject to options exercisable on or before June
10, 2000.
(11) Represents shares subject to options exercisable on or before June 10,
2000.
(12) Includes 7,800 shares subject to options exercisable on or before June
10, 2000.
(13) Includes 344,000 shares subject to options exercisable on or before
June 10, 2000.
-7-
<PAGE> 11
EXECUTIVE COMPENSATION
Pursuant to SEC rules for Proxy Statement disclosure of executive
compensation, the Compensation Committee of the Board of Directors of the
Company has prepared the following Report on Executive Compensation. The
Committee intends that this report clearly describe the current executive
compensation program of the Company, including the underlying philosophy of the
program and the specific performance criteria on which executive compensation is
based. This report also discusses in detail the compensation paid to the
Company's Chief Executive Officer, Mr. Clyde B. Anderson, during fiscal 2000.
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee, which consists of Messrs. Ronald G. Bruno
(who served as Chairman throughout fiscal 2000) and J. Barry Mason, was
responsible for establishing salaries, bonuses and other compensation for the
Company's executive officers for fiscal 2000, as well as for administering the
Company's Stock Option Plan, Employee Stock Purchase Plan and Executive
Incentive Plan. Each member of the Compensation Committee is a non-employee
director.
Compensation Policy. The Company's executive compensation policy is
designed to provide levels of compensation that integrate compensation with the
Company's annual and long-term performance goals and reward above-average
corporate performance, thereby allowing the Company to attract and retain
qualified executives. Specifically, the Company's executive compensation policy
is intended to:
- Provide compensation levels that are consistent with the
Company's business plan, financial objectives and operating
performance;
- Reward performance that facilitates the achievement of the
Company's business plan;
- Motivate executives to achieve strategic operating objectives;
and
- Align the interests of executives with those of stockholders
and the long-term interest of the Company by providing
long-term incentive compensation in the form of stock options.
In light of the Company's compensation policy, the components of its
executive compensation program for fiscal 2000 were base salaries, cash bonuses
and stock options.
Base Salary. Each executive officer's base salary (including the Chief
Executive Officer's base salary) is based upon a number of factors, including
the responsibilities borne by the executive officer and his or her length of
service to the Company. Each executive officer's base salary is reviewed
annually and generally adjusted to account for inflation, the Company's
financial performance, any change in the executive officer's responsibilities
and the executive officer's overall performance. Factors considered in
evaluating performance include financial results such as increases in sales, net
income before taxes and earnings per share, as well as non-financial measures
such as improvements in service and relationships with customers, suppliers and
employees, employee safety and leadership and management development. These
non-financial measures are
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<PAGE> 12
subjective in nature. No particular weight is given by the Compensation
Committee to any particular factor.
Cash Bonuses. Each executive officer, including the Chief Executive
Officer, is eligible to receive an annual cash bonus of up to 70% of his or her
base salary at the time of the award. Cash bonuses generally are paid pursuant
to a bonus program established at the beginning of a fiscal year in connection
with the preparation of the Company's annual operating budget for such year.
Under this bonus program, an executive officer (including the Chief Executive
Officer) is eligible to receive a bonus upon the Company achieving certain net
income goals and the executive officer accomplishing certain individual
performance goals related to his or her job functions.
Stock Options. In September 1992, the Company adopted a Stock Option
Plan under which executive officers, including the Chief Executive Officer, are
eligible to receive stock options. In general, stock option awards are granted
on an annual basis if warranted by the Company's growth and profitability. The
Compensation Committee evaluates the Company's performance against
pre-determined target levels of sales, net income and earnings per share in
determining whether option grants are warranted and the aggregate amount of such
grants. Under the Stock Option Plan, all stock options granted have had exercise
prices no less than the fair market value (generally, the closing sale price of
a share) of the Company's Common Stock on the date of grant. All options granted
to date to employees become exercisable in equal annual increments over a
five-year period and expire on the sixth anniversary of the date of grant. The
Compensation Committee believes that these features serve to align the interests
of executives with those of stockholders and the long-term interests of the
Company. Options to purchase 325,000 shares of Common Stock were granted to a
total of four executive officers in fiscal 2000. The amount of each executive
officer's grant of stock options was based upon an evaluation of such executive
officer's responsibilities and performance, the desirability of long-term
service from the particular executive officer, the aggregate amount of prior
stock option awards to the executive officer and the Company's overall financial
performance. While the Compensation Committee has not established a target level
of stock ownership by the Company's executive officers, it does encourage such
ownership and intends to gradually increase the ownership of the Company's
Common Stock by executive officers and other key employees.
Executive Incentive Plan. During fiscal 1995, the Company adopted the
Books-A-Million, Inc. Executive Incentive Plan (the "Incentive Plan"). The
Incentive Plan provides for awards to certain executive officers of cash, shares
of restricted stock or both, based on the achievement of specific
pre-established performance goals during a three consecutive fiscal year
performance period. No awards were made under the Incentive Plan during fiscal
2000.
Compensation of Chief Executive Officer. During fiscal 2000, the
Company's Chief Executive Officer, Mr. Clyde B. Anderson, earned compensation
comprised of each of the base salary and stock option components of the
Company's executive compensation program described above. The Compensation
Committee established his compensation after reviewing the compensation packages
of other chief executive officers of publicly-traded retailers (as reported in
such companies' proxy statements). The Compensation Committee considered the
size, location, revenues, earnings and capital structure of the retailers whose
chief executive officers' compensation packages were reviewed, and attempted to
provide Mr. Anderson with comparable
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<PAGE> 13
compensation based upon the Committee's subjective comparison of the size,
location, revenues, earnings and capital structure of the Company. During fiscal
2000, Mr. Anderson also received options to purchase 75,000 shares of Common
Stock at an exercise price of $7.69 per share. Mr. Anderson's options have an
exercise price equal to the fair market value (generally, the closing sale price
of a share) of the Company's Common Stock on the date of grant and vest in equal
annual increments over five years, as do the options granted to other executive
officers of the Company.
Limitations on Deductibility of Compensation. Under the 1993 Omnibus
Budget Reconciliation Act, a portion of annual compensation payable after 1993
to any of the Company's five highest paid executive officers would not be
deductible by the Company for federal income tax purposes to the extent such
officer's overall compensation exceeds $1,000,000. Qualifying performance-based
incentive compensation, however, would be both deductible and excluded for
purposes of calculating the $1,000,000 limit. Although the Compensation
Committee does not presently intend to award compensation in excess of the
$1,000,000 limit, it will continue to address this issue when formulating
compensation arrangements for the Company's executive officers.
Mr. Ronald G. Bruno (Chairman)
Dr. J. Barry Mason
The Report on Executive Compensation of the Compensation Committee of
the Board of Directors shall not be deemed to be incorporated by reference as a
result of any general incorporation by reference of this Proxy Statement or any
part hereof in the Company's Annual Report to Stockholders or its Annual Report
on Form 10-K.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Interlocks. As indicated above, the Compensation Committee of the Board
of Directors consists of Messrs. Ronald G. Bruno and J. Barry Mason. During
fiscal 2000, Charles C. Anderson, Clyde B. Anderson and Terry C. Anderson served
as executive officers or directors of a total of nine companies owned or
controlled by the Anderson family (the "Other Companies"), with which there is
an "interlock" relationship, as defined by the SEC, arising from the concurrent
participation of (i) Charles C. Anderson and Clyde B. Anderson, both as
executive officers of the Company and as members of the boards of directors
(and/or the compensation committees) of certain of the Other Companies and (ii)
Charles C. Anderson and Terry C. Anderson, both as executive officers of certain
of the Other Companies and as members of the Board of Directors of the Company.
Certain Transactions. During fiscal 2000, the Company entered into
certain transactions in the ordinary course of business with certain entities
affiliated with Messrs. Charles C. Anderson, Terry C. Anderson and Clyde B.
Anderson. The Board of Directors of the Company believes that all such
transactions were on terms no less favorable to the Company than terms available
from unrelated parties for comparable transactions. Significant activities with
these entities are discussed in the following paragraphs.
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<PAGE> 14
The Company and American Wholesale Book Company ("American Wholesale")
purchase certain of their collectibles and books from Treat Entertainment, Inc.
("Treat"), which is wholly-owned by members of the Anderson family. During
fiscal 2000, such purchases from Treat totaled $2,585,745. The Company and
American Wholesale also purchase certain of their paperback books, newspapers
and a substantial portion of their magazines and music from Anderson News
Corporation ("Anderson News"), virtually all of the outstanding stock of which
is owned by members of the Anderson family. During fiscal 2000, purchases of
these items from Anderson News totaled $31,962,335. During fiscal 2000, the
Company and American Wholesale sold books to Treat and Anderson News in the
amounts of $176,902 and $2,663,778, respectively. The Company and American
Wholesale utilize logistics services from a transportation company, which is
majority-owned by members of the Anderson family. During fiscal 2000, such
services provided by the transportation company totaled $444,548.
The Company leases its principal executive offices from a trust, which
was established for the benefit of the grandchildren of Mr. Charles C. Anderson.
The lease extends to January 31, 2001 and the Company has an option to extend
the term of this lease for five years. During fiscal 2000, the Company paid rent
of $119,294 to the trust under this lease. Anderson & Anderson LLC ("A&A"),
which is wholly owned by members of the Anderson family, also leases three
buildings to the Company. During fiscal 2000, the Company paid A&A a total of
$554,393 in connection with such leases.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "Compensation Committee Interlocks and Insider Participation -
Certain Transactions" above for a description of certain transactions and
relationships between the Company (or American Wholesale) and other entities
affiliated with certain of its executive officers.
-11-
<PAGE> 15
EXECUTIVE OFFICER COMPENSATION
This section of the Proxy Statement discloses the compensation awarded,
paid to or earned by, the Company's Chief Executive Officer and its four most
highly compensated officers other than the Chief Executive Officer during fiscal
2000. Such executive officers are hereinafter referred to as the Company's
"Named Executive Officers."
TABLE I - SUMMARY COMPENSATION TABLE
The following table presents the total compensation of the Company's
Named Executive Officers during each of the fiscal years set forth below.
TABLE I - SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------- ----------------------
Fiscal Salary Bonus Number of Securities All Other
Name Year $ $ (1) Underlying Options(#)(1)(2) Compensation($)
---- ------ ----- ------- -------------------------- ---------------
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Clyde B. Anderson 2000 336,000 262,500 75,000 20,257(4)
Chairman and Chief Executive Officer(3) 1999 310,000 0 55,000 1,447,855(5)
1998 297,000 29,700 75,000 5,530(6)
- -------------------------------------------------------------------------------------------------------------------------
Charles C. Anderson(3) 2000 86,000 0 0 369(4)
1999 86,000 0 35,000 293(5)
1998 82,000 0 50,000 251(6)
- -------------------------------------------------------------------------------------------------------------------------
Sandra B. Cochran 2000 217,000 237,500 160,000 9,633(4)
President and Secretary 1999 193,000 87,250 45,000 914,695(5)
1998 180,000 27,000 60,000 5,246(6)
- -------------------------------------------------------------------------------------------------------------------------
Terrance G. Finley 2000 173,000 100,000 70,000 5,489(4)
President, Booksamillion.com 1999 147,000 45,500 35,000 584,457(5)
1998 140,000 20,400 45,000 4,667(6)
- -------------------------------------------------------------------------------------------------------------------------
Richard S. Wallington 2000 114,000 45,000 20,000 20,809(4)
Chief Financial Officer 1999 102,000 25,000 7,000 83,328(5)
1998 98,000 11,000 7,000 2,371(6)
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) In fiscal 1995, the Company's Board of Directors adopted the
Books-A-Million, Inc. Executive Incentive Plan and authorized Sandra B. Cochran
and Terrance G. Finley to participate in such plan. However, because no awards
were made under the Executive Incentive Plan during fiscal 2000, no amounts are
included in the table with respect to such plan.
(2) All of the options granted to the Company's Named Executive Officers
become exercisable in 20% increments on the first, second, third, fourth and
fifth anniversaries of the date of grant and expire six years from the date of
grant (or earlier if the optionee dies or ceases to be employed full-time by the
Company).
(3) Charles C. Anderson retired as Chairman of the Board on January 29,
2000 and Clyde B. Anderson was appointed Chairman of the Board at that time.
-12-
<PAGE> 16
(4) For fiscal 2000, the amounts shown include (i) matching contributions
by the Company to the Company's 401(k) savings plan ("Matching Contributions")
of $ 4,800 on behalf of each of Clyde B. Anderson and Sandra B. Cochran, $4,435
on behalf of Terrance G. Finley and $2,255 on behalf of Richard S. Wallington,
(ii) life insurance premiums of $1,080, $369, $834, $676 and $355 paid by the
Company on behalf of Clyde B. Anderson, Charles C. Anderson, Sandra B. Cochran,
Terrance G. Finley and Richard S. Wallington, respectively and (iii) gain on
stock options exercised of $18,199 for Richard S. Wallington.
(5) For fiscal 1999, the amounts shown include (i) matching contributions
by the Company to the Company's 401(k) savings plan ("Matching Contributions")
of $ 4,800 on behalf of each of Clyde B. Anderson and Sandra B. Cochran, $4,435
on behalf of Terrance G. Finley and $2,248 on behalf of Richard S. Wallington,
(ii) life insurance premiums of $890, $293, $645, $503 and $159 paid by the
Company on behalf of Clyde B. Anderson, Charles C. Anderson, Sandra B. Cochran,
Terrance G. Finley and Richard S. Wallington, respectively and (iii) gain on
stock options exercised of $1,442,165, $909,250, $579,519 and $80,921 for Clyde
B. Anderson, Sandra B. Cochran, Terrance G. Finley and Richard S. Wallington,
respectively.
(6) For fiscal 1998, the amounts shown include (i) Matching Contributions
of $4,750 on behalf of each of Clyde B. Anderson and Sandra B. Cochran,
respectively, $4,285 on behalf of Terrance G. Finley and $2,177 on behalf of
Richard S. Wallington and (ii) life insurance premiums of $780, $251, $496, $382
and $194 paid by the Company on behalf of Clyde B. Anderson, Charles C.
Anderson, Sandra B. Cochran, Terrance G. Finley and Richard S. Wallington,
respectively.
-13-
<PAGE> 17
TABLE II - OPTION GRANTS IN FISCAL 2000
This table presents information regarding options granted to the
Company's Named Executive Officers during fiscal 2000 to purchase shares of the
Company's Common Stock. The Company has no outstanding stock appreciation rights
("SARs") and granted no SARs during fiscal 2000. In accordance with SEC rules,
the table shows the hypothetical "gains" or "option spreads" that would exist
for the respective options based on assumed rates of annual compound stock price
appreciation of 5% and 10% from the date the options were granted over the full
option term.
TABLE II - OPTION GRANTS IN FISCAL 2000
<TABLE>
<CAPTION>
Individual Grants
---------------------------------------------------
Realizable Value
At Assumed Annual
Number of Rates of Stock Price
Securities Percent of Appreciation for
Underlying Total Options Exercise Option Term
Options Granted to Price Expiration ------------
Name Granted(1) Employees Per Share Date 5% 10%
- ---- ----------- ------------- --------- ---------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Clyde B. Anderson 75,000 10.8% $7.69 1/28/06 $196,150 $444,998
Sandra B. Cochran 100,000 14.4% $9.50 8/25/05 $323,091 $732,983
60,000 8.6% $7.69 1/28/06 $156,920 $355,998
Terrance G. Finley 20,000 2.9% $9.50 8/25/05 $ 64,618 $146,597
50,000 7.2% $7.69 1/28/06 $130,767 $296,665
Richard S. Wallington 20,000 2.9% $7.69 1/28/06 $ 52,307 $118,666
</TABLE>
(1) All of the options granted to the Company's Named Executive Officers
become exercisable in 20% increments on the first, second, third, fourth and
fifth anniversaries of the date of grant and expire six years from the date of
grant or earlier if the optionee dies or ceases to be employed full-time by the
Company.
-14-
<PAGE> 18
TABLE III - OPTION EXERCISES IN FISCAL 2000 AND FISCAL 2000 YEAR-END OPTION
VALUES
The following table shows the number of shares of Common Stock subject
to exercisable and unexercisable stock options held by each of the Named
Executive Officers as of January 29, 2000. The table also reflects the values of
such options based on the positive spread between the exercise price of such
options and $7.69, which was the closing sale price of a share of Common Stock
reported in the Nasdaq National Market on January 28, 2000 (the last trading day
prior to the end of the Company's fiscal year).
TABLE III - FISCAL 2000 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Shares Subject to Value of Unexercised
Unexercised Options at In-the-Money Options
January 29, 2000 at January 29, 2000
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ------------------------- -------------------------
<S> <C> <C>
Clyde B. Anderson 99,000/201,000 $112,500/$139,650
Charles C. Anderson 57,000/78,000 $94,400/$93,100
Sandra B. Cochran 70,000/256,500 $82,240/$103,960
Terrance G. Finley 52,200/14,000 $63,620/$79,910
Richard S. Wallington 7,800/32,800 $4,474/$11,482
</TABLE>
-15-
<PAGE> 19
PERFORMANCE GRAPH
The following indexed line graph indicates the Company's total return
to stockholders from January 27, 1995, to January 28, 2000, the last trading day
prior to the Company's 2000 fiscal year end, as compared to the total return for
the Nasdaq Composite Index and the Nasdaq Retail Trade Stock Index for the same
period.
[GRAPH]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Jan. 27, 1995 Feb. 2, 1996 Jan. 31, 1997 Jan. 30, 1998 Jan. 29, 1999 Jan. 28, 2000
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Books-A-Million, Inc. $100 $ 62 $ 41 $ 41 $ 76 $ 53
- ------------------------------------------------------------------------------------------------------------------------------------
NASDAQ Composite Index $100 $142 $184 $218 $340 $513
- ------------------------------------------------------------------------------------------------------------------------------------
NASDAQ Retail Trade Stocks $100 $112 $138 $161 $197 $161
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-16-
<PAGE> 20
PROPOSAL 2 - RATIFICATION OF INDEPENDENT PUBLIC AUDITOR
The Audit Committee of the Company's Board of Directors has appointed
Arthur Andersen LLP to serve as the Company's independent auditor for its
current fiscal year (fiscal 2001). A representative of this firm is expected to
attend the Annual Meeting to respond to questions from stockholders and to make
a statement if he or she so desires.
The Board of Directors believes it is in the Company's interest for the
stockholders to have a role in ratifying the Audit Committee's selection of
independent auditor. If the stockholders were to vote against ratification of
Arthur Andersen LLP as the Company's independent auditor, the Audit Committee
may select another independent auditing firm.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE IN FAVOR OF THE RATIFICATION OF ARTHUR ANDERSEN LLP
AS THE COMPANY'S INDEPENDENT PUBLIC AUDITOR
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before
the Annual Meeting. However, if any other matters are properly brought before
the Annual Meeting, the persons appointed in the accompanying proxy intend to
vote the Shares represented thereby in accordance with their best judgment.
SOLICITATION OF PROXIES
The cost of the solicitation of proxies on behalf of the Company will
be borne by the Company. In addition, directors, officers and other employees of
the Company may, without additional compensation except reimbursement for actual
expenses, solicit proxies by mail, in person or by telecommunication. The
Company will reimburse brokers, fiduciaries, custodians and other nominees for
out-of-pocket expenses incurred in sending the Company's proxy materials to, and
obtaining instructions relating to such materials from, beneficial owners.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Any proposal that a stockholder may desire to have included in the
Company's proxy material for presentation at the 2001 annual meeting must be
received by the Company at its executive offices at 402 Industrial Lane,
Birmingham, Alabama 35211, Attention: Mr. Clyde B. Anderson, on or prior to
December 26, 2000.
ANNUAL REPORT
The Company's Annual Report to Stockholders for fiscal 2000 (which is
not part of the Company's proxy soliciting material) is being mailed to the
Company's stockholders with this proxy statement.
May 1, 2000
Birmingham, Alabama
-17-
<PAGE> 21
APPENDIX A
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF
BOOKS-A-MILLION, INC.
The undersigned stockholder(s) of Books-A-Million, Inc., a Delaware
corporation (the "Company"), hereby acknowledge(s) receipt of the Notice of
Annual Meeting of Stockholders and Proxy Statement, each dated May 1, 2000, and
hereby appoints Clyde B. Anderson and Sandra B. Cochran, or either of them,
proxies and attorneys-in-fact, with full power of substitution, on behalf and in
the name of the undersigned to represent the undersigned at the 2000 Annual
Meeting of Stockholders of the Company to be held at 10:00 a.m. on Tuesday, June
6, 2000 at The Harbert Center, 2019 Fourth Avenue North, Birmingham, Alabama,
35203 and at any adjournment(s) thereof, and to vote all shares of Common Stock
which the undersigned would be entitled to vote if then and there personally
present, on the matters set forth below.
This Proxy, when properly executed, will be voted in accordance with
the directions given by the undersigned stockholder (s). If no direction is
made, it will be voted FOR Proposals 1 and 2 on the reverse side and as the
proxies deem advisable on such other matters which may properly come before the
meeting (Proposal 3).
(1) To elect the nominees listed below to serve as a director of the
Company for a three-year term expiring in 2003:
Clyde B. Anderson Ronald G. Bruno
[ ] FOR the nominees listed above, [ ] WITHHOLD authority to vote
except as indicated below. for both of the nominees listed above.
* To withhold authority for any individual nominee, mark "FOR" above
and write the name of the nominee as to whom you wish to withhold
authority in the space below:
- --------------------------------------------------------------------------------
(2) To ratify the appointment by the Audit Committee of the Board of
Directors of Arthur Andersen LLP to serve as the Company's independent
auditor for the fiscal year 2001.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued on Reverse Side)
-18-
<PAGE> 22
(3) In their discretion, upon such other matter or matters which may
properly come before the meeting or any adjournment(s) thereof.
PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY PROMPTLY.
Dated , 2000
------------------
------------------------------
Signature
------------------------------
Signature (if held jointly)
Title or authority (if
applicable)
NOTE: Please sign exactly as
name appears hereon. If shares
are registered in more than one
name, the signature of all such
persons are required. A
corporation should sign in its
full corporate name by a duly
authorized officer, stating his
or her title. Trustees,
guardians, executors and
administrators should sign in
their official capacity, giving
their full title as each. If a
partnership, please sign in the
partnership name by an
authorized person.
-19-
