<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
[X] Definitive Proxy Statement Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
JUST FOR FEET, INC.
-----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange ActRule 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:
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[X] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[JUST FOR FEET LETTERHEAD APPEARS HERE]
May 7, 1996
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
your Company, which will be held on Tuesday, May 28, 1996 at 1:00 p.m., Central
Daylight Time, at The Wynfrey Hotel at Riverchase Galleria, 1000 Riverchase
Galleria, Birmingham, Alabama.
The formal notice of the meeting and the proxy statement appear on the
following pages and describe the matters to be acted upon. Time will be
provided during the meeting for discussion and you will have an opportunity to
ask questions about your Company.
Whether or not you plan to attend the meeting in person, it is important
that your shares be represented and voted. After reading the enclosed notice of
the meeting and proxy statement, please complete, sign, date and return the
enclosed proxy at your earliest convenience. Returning the signed and dated
proxy card will not prevent you from voting in person at the meeting should you
later decide to do so.
Sincerely,
/s/ Harold Ruttenberg
-------------------------------------
Harold Ruttenberg
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
JUST FOR FEET, INC.
153 Cahaba Valley Parkway North
Birmingham, Alabama 35124
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 28, 1996
To the Holders of Common Stock of JUST FOR FEET, INC.:
Notice is hereby given that the Annual Meeting of Shareholders of Just For
Feet, Inc., an Alabama corporation (the "Company"), will be held at The Wynfrey
Hotel at Riverchase Galleria, 1000 Riverchase Galleria, Birmingham, Alabama, on
Tuesday, May 28, 1996 at 1:00 p.m. Central Daylight Time for the following
purposes:
(1) To elect six (6) directors to serve for a term of one year and until their
successors have been elected and qualified;
(2) To approve an amendment to the Company's Articles of Incorporation to
increase the number of authorized shares of stock from 25,002,667 shares to
75,000,000 shares, consisting of 70,000,000 shares of common stock and
5,000,000 shares of preferred stock, and to eliminate the authorized Series
A Preferred Stock;
(3) To approve an amendment to the Company's Articles of Incorporation to give
the Board of Directors the power to fill vacancies on the Board resulting
from an increase in the number of directors;
(4) To approve an amendment to the Company's Employee Incentive Stock Option
Plan to increase the number of shares available for issuance pursuant to
such Plan from 1,650,000 shares to 3,000,000 shares; and
(5) To conduct such other business as may properly come before the meeting or
any adjournment thereof.
Only shareholders of record as of the close of business on May 2, 1996 will
be entitled to notice of and to vote at the meeting or any adjournment thereof.
By Order of the Board of Directors
/s/ Scott C. Wynne
---------------------------------------
Scott C. Wynne
Secretary
Birmingham, Alabama
May 7, 1996
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN
PERSON, YOU ARE URGED TO COMPLETE, SIGN, DATE AND PROMPTLY MAIL THE ENCLOSED
PROXY IN THE ACCOMPANYING POSTAGE PAID ENVELOPE. IF YOU ATTEND THE MEETING, YOU
MAY REVOKE THE PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE>
JUST FOR FEET, INC.
ANNUAL MEETING OF SHAREHOLDERS
MAY 28, 1996
______________________________________________
PROXY STATEMENT
______________________________________________
This proxy statement and form of proxy, which are first being mailed to
shareholders on or about May 7, 1996, are furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of Just For Feet,
Inc. (the "Company"), for use at the Annual Meeting of Shareholders of the
Company to be held at The Wynfrey Hotel at Riverchase Galleria, 1000 Riverchase
Galleria, Birmingham, Alabama, on Tuesday, May 28, 1996, at 1:00 p.m. Central
Daylight Time and at any or all adjournments or postponements thereof. The
address of the principal executive offices of the Company is 153 Cahaba Valley
Parkway North, Birmingham, Alabama 35124 and the Company's telephone number is
(205) 403-8000.
The cost of this solicitation will be borne by the Company. In addition to
the mails, proxies may be solicited by officers and regular employees of the
Company, without remuneration, by personal interviews, telephone and facsimile.
It is anticipated that banks, brokerage houses and other custodians, nominees
and fiduciaries will forward soliciting material to beneficial owners of stock
entitled to vote at the meeting, and such persons will be reimbursed for the
out-of-pocket expenses incurred by them in this connection.
Any proxy given pursuant to this solicitation may be revoked by any
shareholder who attends the meeting and gives oral notice of his election to
vote in person, without compliance with any other formalities. In addition, any
proxy given pursuant to this solicitation may be revoked prior to the meeting by
delivering to the Secretary of the Company an instrument revoking it or a duly
executed proxy for the same shares bearing a later date. Proxies which are
returned properly executed and not revoked will be voted and will be voted in
accordance with the shareholder's directions specified thereon. Where no
direction is specified, proxies will be voted FOR the election of the nominees
for director named herein, FOR the approval of the amendments to Company's
Articles of Incorporation, FOR the approval of the amendment to the Employee
Incentive Stock Option Plan and, on other matters presented for a vote, in
accordance with the judgment of the persons acting under the proxies.
Abstentions and broker non-votes will not be counted as votes either in favor of
or against the matter with respect to which the abstention or broker non-vote
relates.
Only shareholders of record at the close of business on May 2, 1996 will be
entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof. As of May 2, 1996, the Company had outstanding 17,548,907 shares of
common stock. Each share of common stock issued and outstanding on such record
date is entitled to one vote.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Based solely on information made available to the Company, the following
table sets forth certain information as of May 2, 1996 with respect to the
beneficial ownership of the Company's common stock by (i) each person known by
the Company to own beneficially more than five percent (5%) of the Company's
common stock, (ii) each director and director nominee of the Company, (iii) each
of the executive officers of the Company named in the Summary Compensation table
on page 5, and (iv) all directors and executive officers of the Company as a
group.
<TABLE>
<CAPTION>
Shares of
Common Stock Percent of
Beneficial Owner Beneficially Owned/(1)/ Outstanding Shares
- - ------------------------------------ ----------------------- -------------------
<S> <C> <C>
Harold Ruttenberg/(2)/ 4,763,256 27.2%
Pamela B. Ruttenberg/(3)/ 1,847,372 10.5
FMR Corp./(4)/ 1,289,200 7.4
Pilgram Baxter & Associates, Ltd./(5)/ 1,286,600 7.3
State Street Research
& Management Company/(6)/ 1,080,100 6.2
Metropolitan Life Insurance
Company/(7)/ 1,080,100 6.2
Karl B. Friedman, as Trustee for the
Pamela B. Ruttenberg Irrevocable
Children's Trust/(8)/ 434,924 2.5
Adam J. Gilburne/(9)/ 203,498 1.2
Robert C. Wabler/(10)/ 182,321 1.0
Ruttenberg Family Foundation/(11)/ 109,100 *
Don-Allen Ruttenberg/(12)/ 39,705 *
Scott C. Wynne/(12)/ 39,705 *
Randall L. Haines/(13)/ 12,725 *
Michael P. Lazarus/(14)/ 12,500 *
Bart Starr, Sr. 6,768 *
David F. Bellet/(15)/ -- --
All executive officers and
directors as a group (8 persons)/(16)/ 5,260,478 29.5%
</TABLE>
- - ------------
* Less than 1%.
/(1)/ Unless otherwise indicated, each person has sole voting and investment
power as to all such shares. Shares of Common Stock underlying options to
purchase Common Stock are deemed to be outstanding for the purpose of
computing the outstanding Common Stock owned by the particular person and
by the group, but are not deemed outstanding for any other purpose.
/(2)/ Harold Ruttenberg and Pamela B. Ruttenberg are husband and wife. Includes
2,915,884 shares owned directly by Harold Ruttenberg and 1,847,372 shares
held by him as Trustee under a Voting Trust Agreement for the benefit of
Pamela B. Ruttenberg which terminates in 2003. Mr. Ruttenberg's address is
153 Cahaba Valley Parkway North, Birmingham, Alabama 35124.
-2-
<PAGE>
/(3)/ Represents shares held by Harold Ruttenberg as Voting Trustee for Pamela
B. Ruttenberg, with respect to which Mr. Ruttenberg has voting power. Mrs.
Ruttenberg retains the power to dispose of such shares. Mrs. Ruttenberg's
address is 153 Cahaba Valley Parkway North, Birmingham, Alabama 35124.
/(4)/ Based upon a statement on Schedule 13G dated February 15, 1996 filed by
FMR Corp. These shares include 26,600 shares over which FMR Corp. has sole
voting power and 1,289,200 over which FMR Corp. has sole dispositive power.
The Company makes no representation as to the accuracy or completeness of
the information reported. FMR Corp.'s business address is 82 Devonshire
Street, Boston, Massachusetts 02109.
/(5)/ Based upon a statement on Schedule 13G dated February 15, 1996 filed by
Pilgrim Baxter & Associates, Ltd. ("Pilgrim"). Pilgrim, as an investment
advisor, has sole dispositive power and shares voting power with respect to
all shares. The Company makes no representation as to the accuracy or
completeness of the information reported. The business address of Pilgrim
is 1255 Drummers Lane, Suite 300, Wayne, Pennsylvania 19087.
/(6)/ Based upon a statement on Schedule 13G dated February 14, 1996 filed by
State Street Research & Management Company ("State Street"). State Street
disclaims any beneficial interest in the shares. The Company makes no
representation as to the accuracy or completeness of the information
reported. State Street's business address is One Financial Center, 30th
Floor, Boston, Massachusetts 02111-2690.
/(7)/ Based upon a statement on Schedule 13G dated February 13, 1996 filed by
Metropolitan Life Insurance Company. The Company makes no representation
as to the accuracy or completeness of the information reported. The
business address of Metropolitan Life Insurance Company is One Madison
Avenue, New York, New York 10010.
/(8)/ Trust is for the benefit of the three adult children of Harold and Pamela
Ruttenberg. The shares held in the trust are allocated pro rata among the
three children. Mr. Friedman disclaims beneficial ownership of the shares
in the trust.
/(9)/ Includes 48,168 shares subject to outstanding options to purchase Common
Stock which are exercisable within 60 days. Excludes 109,752 shares
subject to outstanding options to purchase Common Stock which will become
exercisable at various dates in the future.
/(10)/ Includes 27,025 shares owned by Mr. Wabler's wife and 135,581 shares
subject to outstanding options to purchase Common Stock which are
exercisable within 60 days. Excludes 133,509 shares subject to outstanding
options to purchase Common Stock which will become exercisable at various
dates in the future.
/(11)/ Shares held by the Ruttenberg Family Foundation for the benefit of the
Birmingham Jewish Federation. The Ruttenbergs disclaim beneficial
ownership of the shares held by the Foundation.
/(12)/ Includes 39,705 shares subject to outstanding options to purchase Common
Stock which are exercisable within 60 days. Excludes 63,970 shares subject
to outstanding options to purchase Common Stock which will become
exercisable at various dates in the future.
/(13)/ Includes 12,500 shares subject to outstanding options to purchase Common
Stock which are exercisable within 60 days. Excludes 27,500 shares subject
to outstanding options to purchase Common Stock which will become
exercisable at various dates in the future.
/(14)/ Represents shares subject to outstanding options to purchase Common Stock
which are exercisable within 60 days. Excludes 27,500 shares subject to
outstanding options to purchase Common Stock which will become exercisable
at various dates in the future.
/(15)/ Mr. Bellet is a nominee for election as a director of the Company.
/(16)/ Includes outstanding options to purchase an aggregate of 288,159 shares
of Common Stock held by executive officers and directors which are
exercisable within 60 days. Excludes 426,201 shares subject to outstanding
options to purchase Common Stock which will become exercisable at various
dates in the future.
There are no arrangements known to the Company, the operation of which may,
at a subsequent date, result in a change in control of the Company.
-3-
<PAGE>
AGENDA ITEM ONE
ELECTION OF DIRECTORS
The Board of Directors of the Company, pursuant to the Company's Bylaws, has
set the number of directors to serve for the next year at six, all of whom are
to be elected at the Annual Meeting. Proxies received will be voted for all the
nominees named below, unless authority to do so is withheld. In the event any
nominee is unable or declines to serve as a director at the time of the meeting,
the persons named as proxies therein will have discretionary authority to vote
the proxies for the election of such person or persons as may be nominated in
substitution by the present Board of Directors. Management knows of no current
circumstances which would render any nominee named herein unable to accept
nomination or to serve if elected.
Members of the Board of Directors are elected annually to serve until the
next annual meeting of shareholders and until their successors are elected and
qualified. Directors will be elected by a majority of the votes cast by the
shares entitled to vote on the election of directors.
The following persons have been nominated by management for election to the
Board of Directors:
HAROLD RUTTENBERG, age 53, is the founder of the Company and has served as
its Chairman, President and Chief Executive Officer since its inception in 1977.
ROBERT C. WABLER, age 47, has been employed by the Company since May 1993
and was elected Executive Vice President, Chief Financial Officer and a director
in August 1993. From 1989 to May 1993, Mr. Wabler was Senior Vice President-
Finance and Administration of The Athlete's Foot Group where his
responsibilities included personnel, inventory systems, financial controls and
reporting, and commercial and investment banking relationships.
BART STARR SR., age 62, has served as a director of the Company since August
1993. He has served as the Chairman of the Board of Healthcare Realty
Management, a real estate development company, since 1990 and from 1984 to 1990
was a partner in RAL Management Group, also a real estate development company.
From 1956 to 1972, Mr. Starr was a professional football player for the Green
Bay Packers of the National Football League. He presently serves as a
spokesperson for the Company.
MICHAEL P. LAZARUS, age 40, has served as a director of the Company since
August 1993. Mr. Lazarus has served as a Managing Partner of Weston Presidio
Capital Management, L.P., a venture capital firm, since 1991. From 1986 to 1991,
he served as Managing Director and Director of the Private Placement Department
of Montgomery Securities.
RANDALL L. HAINES, age 53, has served as a director of the Company since May
1994. Mr. Haines has served as President of Compass Bank - Birmingham since
February 1996. From January 1993 to January 1996, Mr. Haines served as
President of Compass Bank of Huntsville, Alabama. From 1986 to January 1993, Mr.
Haines served as Commercial Banking Manager of Compass Bank of Birmingham,
Alabama.
DAVID F. BELLET, age 49, has been Chairman of Crown Advisors Ltd., a private
investment counseling firm, since founding the firm in 1981. He is also a
general partner in the limited partnerships managed by Crown in the venture
capital industry. From 1969 to 1981, Mr. Bellet was a Vice President of
Citibank in the Investment Management Group. Mr. Bellet also serves on the
Board of Directors of One Price Clothing Stores.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION OF
THE NOMINEES NAMED IN THIS PROXY STATEMENT.
-4-
<PAGE>
COMMITTEES OF THE BOARD AND MEETINGS
The Company's Board of Directors presently has the following standing
committees:
(A) The Audit Committee, currently comprised of Messrs. Lazarus and Starr.
The Audit Committee, which held one meeting in fiscal 1995, is responsible for
recommending the Company's independent auditors, reviewing with the independent
auditors the scope and results of audits, monitoring the Company's financial and
control procedures, monitoring the non-audit services provided by the Company's
auditors and reviewing all potential conflict of interest situations.
(B) The Compensation Committee, currently comprised of Messrs. Ruttenberg,
Lazarus and Haines. Mr. Bart Starr served as a member of the Compensation
Committee during fiscal 1995. Mr. Starr resigned from the Compensation
Committee in February 1996 and Mr. Haines was appointed his successor. The
Compensation Committee, which held two meetings during fiscal 1995, is
responsible for establishing the salaries, bonuses and other compensation of the
executive officers of the Company and is responsible for administering the
Company's stock option plans.
The Company does not have a Directors Nominating Committee, that function
being reserved to the entire Board of Directors.
During fiscal 1995, the Board of Directors held a total of seven meetings
and acted three times by unanimous written consent. Each incumbent director
attended at least 75% of the aggregate number of meetings held by the Board and
by the Committees of the Board on which he served during the term of his
service.
Mr. Edward S. Croft, III serves as an advisory member of the Board of
Directors and receives directors fees described under "Executive Compensation -
Compensation of Directors."
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, certain officers and persons who own more than 10% of the
outstanding common stock of the Company, to file with the Securities and
Exchange Commission reports of changes in ownership of the common stock of the
Company held by such persons. Officers, directors and greater than 10%
shareholders are also required to furnish the Company with copies of all forms
they file under this regulation. To the Company's knowledge, based solely on a
review of the copies of such reports furnished to the Company and
representations that no other reports were required, during fiscal 1995, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10% shareholders were complied with, except that one report
covering one transaction was inadvertently filed late by each of Mr. Wabler and
Pamela B. Ruttenberg.
-5-
<PAGE>
EXECUTIVE COMPENSATION
The following table provides certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the Company's
Chief Executive Officer and any other officer whose cash compensation during
fiscal 1995 exceeded $100,000 (the "Named Executive Officers), for fiscal 1995,
1994 and 1993:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------- ------------
SECURITIES
FISCAL OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
- - --------------------------- ------ ------ ------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Harold Ruttenberg 1995 $391,666 -- $ 18,060 -- $ 17,650/(1)/
Chairman, President and 1994 281,612 -- 34,121/(2)/ -- 14,444/(1)/
Chief Executive Officer 1993 95,000 -- 35,630/(3)/ -- 226,181/(4)/
Robert C. Wabler 1995 $230,000 -- -- -- 1,980/(1)/
Executive Vice President and 1994 214,059 -- -- 75,000 shares 1,720/(1)/
Chief Financial Officer 1993 120,513 -- -- 280,837 shares 900/(1)/
Adam J. Gilburne/(5)/ 1995 $150,000 -- -- -- --
Executive Vice President - 1994 150,000 $50,000 -- 157,920 shares --
Merchandising
Don-Allen Ruttenberg 1995 $ 85,615 -- -- -- --
Vice President - 1994 63,632 $25,000 -- 30,000 shares --
Merchandising 1993 50,336 -- -- 84,926 shares --
Scott C. Wynne 1995 $ 88,692 -- -- -- --
Vice President - 1994 63,562 $25,000 -- 30,000 shares --
Administration and 1993 46,724 -- -- 84,926 shares --
Secretary
</TABLE>
- - ------------------------
/(1)/ Represents premiums paid by the Company for term life insurance on behalf
of the Named Executive Officer.
/(2)/ Includes country club dues totaling $2,650, health insurance premiums
totaling $3,880 and lease payments on two automobiles aggregating
$27,591.
/(3)/ Includes country club dues totaling $2,162, health insurance premiums
totaling $3,838 and lease payments on two automobiles aggregating
$29,630.
/(4)/ Paid to Mr. Ruttenberg in the form of a one-time bonus to repay a
shareholder loan in the principal amount of $150,000 and $76,181 for
income taxes.
/(5)/ Mr. Gilburne was employed by the Company effective March 18, 1994.
-6-
<PAGE>
EMPLOYMENT AND NONCOMPETITION AGREEMENTS
On May 9, 1993, the Company entered into a five-year employment agreement
with Robert C. Wabler. Under the terms of such agreement, Mr. Wabler received an
initial base annual salary of $200,000, subject to a $10,000 annual minimum
increase, as well as an annual bonus to be determined at the discretion of the
Board of Directors and other bonuses in connection with his future acquisition
of up to 105,322 of the Company's common stock, plus certain other employee
benefits. The employment agreement contains non-competition provisions which
prohibit Mr. Wabler from becoming employed by or connected with any other entity
which operates under an athletic footwear superstore format similar to that of
the Company for a period of three and one-half years after the termination of
his employment, except in the event of the termination by the Company in
violation of the terms of the agreement. The agreement allows the Company to
terminate employment on 12 months' notice without cause and upon 30 days' notice
with cause.
On March 18, 1994, the Company entered into a five-year employment agreement
with Adam J. Gilburne. Under this agreement, Mr. Gilburne serves as a Vice
President of the Company and receives an annual salary of $150,000 for the first
two years of his employment and $175,000 for each year thereafter, plus a bonus
of $50,000 each year if certain performance criteria are achieved by the
Company. He also received, under the Company's Stock Option Plan, options to
purchase 120,420 shares of common stock at a price of $6.22 per share. Mr.
Gilburne's employment agreement contains a non-competition provision which
prohibits Mr. Gilburne from becoming employed by or connected with any entity
engaged in the retail sale of shoes through use of a superstore format, within a
radius of 50 miles of any Just For Feet store, for a period of three years after
the termination of his employment, except in the event of the termination by the
Company in violation of the terms of the agreement.
OPTIONS
No options were granted to the Named Executive Officers during fiscal 1995.
The following table presents information regarding options exercised by the
Named Executive Officers during fiscal 1995 and the value of options outstanding
at January 31, 1996.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
FISCAL YEAR END AT FISCAL YEAR END
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE VALUE REALIZED UNEXERCISABLE UNEXERCISABLE
- - --------------------------- --------------- -------------- ----------------------- ---------------------
<S> <C> <C> <C> <C>
Harold Ruttenberg -- -- -- --
Robert C. Wabler 30,271 $882,854 135,581/133,509 $3,920,325/$3,041,413
Adam J. Gilburne -- -- 24,084/133,836 $ 599,812/$3,074,061
Don-Allen Ruttenberg -- -- 39,705/63,970 $1,148,070/$1,522,093
Scott C. Wynne -- -- 39,705/63,970 $1,148,070/$1,522,093
</TABLE>
-7-
<PAGE>
COMPENSATION OF DIRECTORS
Non-employee directors of the Company receive directors fees of $1,000 for
each meeting of the Board or a committee thereof attended. All directors receive
reimbursement of reasonable out-of-pocket expenses incurred in connection with
meetings of the Board. No director who is an officer or employee of the Company
receives compensation for services rendered as a director. The Company
maintains a stock option plan for the benefit of its non-employee directors.
The Just For Feet, Inc. Non-Employee Director Stock Option Plan (the "Directors
Plan") reserves 187,500 shares of common stock for issuance pursuant to the
exercise of options granted under such plan. The Directors Plan provides for an
initial grant of options to purchase 25,000 shares to all existing non-employee
directors (with the exception of Mr. Bart Starr) and to any person who becomes a
non-employee director in the future. In addition, the Directors Plan provides
that each year on the first day of the Company's fiscal year, each then non-
employee director will be automatically granted options to purchase 2,500 shares
of common stock at an exercise price equal to the fair market value of the
common stock on the grant date.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Harold Ruttenberg, President and Chief Executive Officer of the Company, has
served as a member of the Compensation Committee of the Board of Directors since
that committee was appointed in August 1993.
Mr. Ruttenberg has guaranteed payment of certain payables owed by the
Company to certain of its vendors, the aggregate amount of which averages
approximately $17,000,000 on a monthly basis.
Mr. Bart Starr, a director of the Company, served as a member of the
Compensation Committee of the Board of Directors from August 1993 until his
resignation from such committee in February 1996. Since June 1991, Mr. Starr has
served as spokesperson for the Company and has made appearances at the Company's
stores during store openings and for special promotions. In exchange for these
services, he was paid compensation by the Company in the amount of $15,000
during fiscal 1993. In August 1994, the Company and Mr. Starr entered into a
Personal Service Contract for the period ending March 31, 1995, which contract
automatically renews for one-year periods unless either party provides the other
thirty days notice of termination prior to the end of the current term. The
agreement provides that the Company will pay Mr. Starr $30,000 for the period
ending March 31, 1995 and for each year thereafter for his services as
spokesperson. In addition, such agreement provides for the issuance by the
Company to Mr. Starr of common stock with a fair market value of $50,000 in 1994
(which stock was issued in August 1994) and $25,000 on each renewal date of the
agreement.
Management believes that each of the above transactions was entered into on
terms no less favorable to the Company than could have been obtained from
unaffiliated third parties, at the time such transactions were negotiated.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For information regarding transactions between the Company and either of
Harold Ruttenberg or Bart Starr, see "Compensation Committee Interlocks and
Insider Participation."
Randall L. Haines, a director of the Company, is president of Compass Bank -
Birmingham. The Company has a revolving line of credit at Compass Bank, pursuant
to which the Company may borrow up to $10,000,000 for general corporate
purposes. As of January 31, 1996, there were no borrowings under such line of
credit. In addition, in May 1995, Compass Bank made loans to the Company in the
principal amounts of $1,260,000 and $1,710,000 for the acquisition of land and
construction of the
-8-
<PAGE>
Company's new headquarters facility and for the Knoxville, Tennessee superstore,
respectively. The headquarters loan bears interest at 8% per annum over its 10
year term and the Knoxville superstore loan bears interest at the bank's prime
rate over its 15 year term.
The Company owns 20,500 shares in Compass Bank Short-Term High Quality Bond
Fund, a pooled fund administered by Compass Bank which invests primarily in
corporate and government agency securities. As of January 31, 1996, such shares
had a market value of approximately $2,081,000.
On January 28, 1996, the Company borrowed $55,000,000 from Compass Bank on a
short-term basis to fund a portion of the purchase price of $90,000,000 face
amount of U.S. Treasury Bills. The loan bore interest at 8 1/2% per annum. The
Company sold the Treasury Bills on February 2, 1996 and repaid the loan from
Compass Bank in full.
It is the policy of the Company not to enter into any transaction with a
related party, without the approval of a majority of disinterested directors.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this proxy statement, in whole or in part, the following Report of the
Compensation Committee of the Board of Directors on Executive Compensation and
the Shareholder Return Performance Graph shall not be incorporated by reference
into any such filings.
REPORT OF COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
In accordance with the proxy statement rules of the Securities and Exchange
Commission, the Compensation Committee of the Board of Directors of the Company
offers the following report regarding compensation policies for executive
officers and the Chief Executive Officer of the Company and information with
respect to compensation paid to such persons during the last fiscal year.
The Compensation Committee of the Board of Directors is comprised of the
Company's President and Chief Executive Officer and two non-employee directors
of the Company. It is the Committee's responsibility to establish the salaries,
bonuses and other compensation of the chief executive and other executive
officers of the Company.
The Compensation Committee utilizes the following guidelines for
compensation decisions:
. Provide a competitive compensation package that enables the Company to
attract and retain key executives.
. Integrate compensation programs with the Company's annual and long-term
business strategies and objectives and focus executive actions on the
fulfillment of those objectives.
The Company's executive compensation program generally consists of base
salary, annual incentive compensation and long-term equity incentives in the
form of stock options. Base salaries for executive officers are reviewed and
adjusted annually following a review of the Company's performance during the
previous fiscal year, the individual's contribution to that performance and the
individual's level of responsibility. To align executive officers' interests
more closely with the interests of the shareholders of the Company, the
Company's long-term compensation program emphasizes the grant of stock options
exercisable for shares of common stock. The amount of such awards, if any, is
determined one or more times each year by the Compensation Committee. The
Compensation Committee may take into account
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<PAGE>
various factors in determining the size of stock option grants, including the
need to attract and retain individuals who will provide valuable service to the
Company.
The fiscal 1995 compensation of Harold Ruttenberg, the Company's President
and Chief Executive Officer, was set by the Compensation Committee at $400,000,
plus a bonus to be determined in the discretion of the Board of Directors. The
Board of Directors elected not to grant a bonus to Mr. Ruttenberg in fiscal
1995. In order that the Compensation Committee may remain disinterested in its
administration of the Company's stock option plans, Mr. Ruttenberg is not
eligible to receive awards under any such plan.
In approving the compensation paid to Mr. Ruttenberg in fiscal 1995, the
Compensation Committee considered the following factors:
(a) the reasonableness of Mr. Ruttenberg's salary in amount relative to the
chief executive officers of similarly placed public companies; and
(b) the fact that Mr. Ruttenberg was already amply incentivised to have the
Company perform well by virtue of his ownership of a substantial percentage of
the common stock of the Company.
With respect to the other executive officers of the Company, the
Compensation Committee considered the compensation levels to be commensurate
with those of similarly positioned executives in similar companies.
Harold Ruttenberg
Michael P. Lazarus
Bart Starr, Sr.
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SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change
in the cumulative total shareholder return on the Company's common stock against
the cumulative total return of the Nasdaq Market Index and an index of peer
companies selected by the Company on the basis of having similar business
formats as the Company (the "Peer Group Index") during the two-year period
commencing March 9, 1994 (the date the Company's common stock commenced trading
on the Nasdaq National Market) and ending January 31, 1996. The Peer Group is
comprised of the following companies: Finish Line Inc., PETsMart Inc.,
Sportmart Inc., Sports & Recreation Inc. and Sports Authority, Inc. In
developing the Peer Group Index, the returns of all the companies in such index
were weighted according to stock market capitalization at the beginning of the
period. The graph assumes that the value of the investment in the Company's
common stock and each index was $100 on March 9, 1994.
[GRAPH APPEARS HERE]
COMPARE CUMULATIVE TOTAL RETURN
AMONG JUST FOR FEET, INC.,
NASDAQ MAKET INDEX AND PEER GROUP INDEX
NASDAQ PEER
Measurement period JUST FOR FEET MARKET GROUP
(Fiscal year Covered) INC. INDEX INDEX
- - --------------------- ------------- ------ ------
Measurement PT -
1994 100.00 100.00 100.00
1995 192.93 93.66 100.39
1996 458.83 131.13 99.13
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AGENDA ITEM TWO
PROPOSAL TO AMEND ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
AND ELIMINATE SERIES A PREFERRED STOCK
At a meeting of the Board of Directors of the Company on March 5,
1996, the directors approved an amendment to Article 4 of the Company's Amended
and Restated Articles of Incorporation (the "Articles of Incorporation") to
increase the number of authorized shares of Common Stock of the Company from
20,000,000 shares to 70,000,000 shares and to eliminate the authorized class of
Series A Preferred Stock. In connection therewith, the following resolution
will be introduced at the Annual Meeting:
RESOLVED: That Article 4 of the Articles of Incorporation is amended
by deleting Section 4.4 thereof (entitled "Series A Preferred Stock") in its
entirety and by amending Section 4.1 thereof (entitled "Authorization") to read
in its entirety as follows:
"4.1 Authorization. The aggregate number of shares which the
-------------
Company shall have authority to issue shall be Seventy-Five
Million (75,000,000), divided into Seventy Million (70,000,000)
shares of Common Stock with a par value of $.0001 per share, and
Five Million (5,000,000) shares of such preferred stock, with a
par value of $.0001 per share, as the Board of Directors may
decide to issue pursuant to Section 4.3 hereof, constituting a
total authorized capital of Seven Thousand Five Hundred Dollars
($7,500)."
The Board of Directors recommends that shareholders approve the
proposed amendment to the Company's Articles of Incorporation because it
considers the proposal to be in the best long-term and short-term interests of
the Company, its shareholders and its other constituencies. The Board of
Directors has proposed eliminating the authorized Series A Preferred Stock
because none of such shares remain outstanding. The Articles of Incorporation
currently authorize the issuance of 2,667 shares of Series A Preferred Stock
with very detailed rights and preferences of such shares set forth in Section
4.4 of the Articles. All of the shares of Series A Preferred Stock were issued
to private investors to raise capital in August 1993 prior to the Company's
initial public offering. All shares of Series A Preferred Stock were converted
into Common Stock upon consummation of the initial public offering.
The proposed increase in the number of shares of authorized Common
Stock will ensure that additional shares of Common Stock will be available, if
needed, for issuance in connection with any possible future transactions
approved by the Board of Directors, including, among others, stock splits, stock
dividends, acquisitions, financings and other corporate purposes.
The Board of Directors believes that the availability of the
additional shares of Common Stock for such purposes without delay or the
necessity for a special shareholders' meeting (except as may be required by
applicable law or regulatory authorities or by the rules of any stock exchange
on which the Company's securities may then be listed) will be beneficial to the
Company by providing it with the flexibility required to consider and respond to
future business opportunities and needs as they arise. The availability of
additional authorized shares of Common Stock will also enable the Company to act
promptly when the Board of Directors determines that the issuance of additional
shares of Common Stock is advisable. It is possible that shares of Common Stock
may be issued at a time and under circumstances that may dilute the voting power
of existing shareholders, increase or decrease earnings per share and increase
or decrease the book value per share of shares presently held.
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<PAGE>
The Company does not have any immediate agreements, arrangements,
commitments or understandings with respect to the issuance of any of the
additional shares of Common Stock which would be authorized by the proposal to
increase the number of authorized shares.
On May 2, 1996, 17,548,907 shares of Common Stock were issued and
outstanding.
It should be noted that the availability of additional shares could
render more difficult or discourage a takeover attempt. For example, additional
shares of Common Stock could be issued and sold to purchasers who oppose a
takeover bid which is not in the best long-term and short-term interests of the
Company, its shareholders and its other constituencies or could be issued to
increase the aggregate number of outstanding shares of Common Stock and thereby
dilute the interest of parties attempting to obtain control of the Company. In
connection with any issuance of shares of Common Stock, the Board of Directors
is required to determine that such issuance would be in the best long-term and
short-term interests of the Company, its shareholders and its other
constituencies. The Board of Directors is presently unaware of any specific
effort to accumulate the shares of Common Stock of the Company or obtain control
of the Company.
Adoption of the proposed amendment to the Articles of Incorporation
requires the affirmative vote of a majority of the votes of the shares present
or represented by proxy at the Annual Meeting. THE BOARD OF DIRECTORS
RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS APPROVE THE PROPOSED AMENDMENT TO THE
ARTICLES OF INCORPORATION.
AGENDA ITEM THREE
PROPOSAL TO AMEND ARTICLES OF INCORPORATION TO
AUTHORIZE THE BOARD OF DIRECTORS TO FILL VACANCIES RESULTING
FROM AN INCREASE IN THE NUMBER OF DIRECTORS
At a meeting of the Board of Directors of the Company on March 5,
1996, the directors approved an amendment to Section 8.2 of the Company's
Articles of Incorporation to authorize the Board of Directors to fill any
vacancy on the Board of Directors resulting from an increase in the number of
directors. In connection therewith, the following resolution will be introduced
at the Annual Meeting:
RESOLVED: That Section 8.2 of the Articles of Incorporation is amended
by adding the following new sentence to the end of Section 8.2 as it currently
exists:
"The Board of Directors shall have the power to fill vacancies on
the Board of Directors, including vacancies resulting from an increase in
the number of directors."
The Board of Directors recommends that shareholders approve the
proposed amendment to the Company's Articles of Incorporation because it
considers the proposal to be in the best long-term and short-term interests of
the Company, its shareholders and its other constituencies. Under Alabama law,
the Board of Directors has the power to fill vacancies on the Board of
Directors. Alabama law further provides, however, that if any such vacancy
occurs as a result of an increase in the number of directors, the Board of
Directors does not have the power to fill such vacancy unless that power is
expressly provided for in the Articles of Incorporation. The Board of Directors
believes that such ability will provide it with needed flexibility in
constructing a strong board of directors comprised of individuals of outstanding
ability and credentials. The Board of Directors believes that opportunities may
occasionally arise for the Company to add to its Board of Directors under
circumstances where the ability to act quickly is essential. The Board of
Directors would possess such ability if it were authorized to increase the
number of directors and appoint an individual to fill the resulting vacancy. In
such circumstances,
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<PAGE>
an individual would be appointed to serve until the next annual meeting of
shareholders, at which time the shareholders would vote on the entire Board of
Directors for the ensuing year.
Alabama law provides that if a board of directors has the power to
change the number of directors, the board may only increase (or decrease) by 30
percent or less the number of directors last approved by the shareholders.
Thus, if the proposal is adopted, the Company's Board of Directors would be
restricted as to the size of any increase authorized by it.
It should be noted that the power of the Board of Directors to
increase the number of directors and fill vacancies resulting from that increase
could render more difficult or discourage a takeover attempt. The Company's
Articles of Incorporation currently provide that at such time as the number of
directors on the Company's Board of Directors is nine (9), the Board shall be
divided into three classes, each of which will serve a term of three years. A
classified Board of Directors may delay, defer or prevent a takeover attempt
that a shareholder of the Company might consider to be in the best interests of
the Company and its shareholders.
Adoption of the proposed amendment to the Articles of Incorporation
requires the affirmative vote of a majority of the votes of the shares present
or represented by proxy at the Annual Meeting. THE BOARD OF DIRECTORS
RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS APPROVE THE PROPOSED AMENDMENT TO THE
ARTICLES OF INCORPORATION.
AGENDA ITEM FOUR
PROPOSAL TO AMEND EMPLOYEE INCENTIVE STOCK OPTION PLAN
In August 1993, the Board of Directors and shareholders of the Company
adopted the Just For Feet, Inc. Employee Incentive Stock Option Plan (the
"Plan"). The purpose of the Plan is to serve as an incentive and to encourage
stock ownership by selected directors, officers and employees of the Company and
to encourage them to remain in the employ of the Company. Under the Plan, the
Company may grant incentive stock options as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). The Company initially
reserved 351,667 shares of the Company's $.0001 par value common stock to cover
options to be granted under the Plan during its ten-year term. On January 18,
1994, the Board of Directors and shareholders authorized an additional 128,333
shares for issuance pursuant to the exercise of options granted under the Plan.
Following a recapitalization effected in January 1994 in anticipation of the
Company's initial public offering and a stock split effected in the form of a
50% stock dividend declared and paid in November 1994, the Plan authorized a
maximum of 902,880 shares for issuance pursuant to the Plan. At the 1995 Annual
Meeting, the shareholders of the Company approved an amendment to the Plan
increasing the number of shares reserved for issuance under the Plan from
902,880 shares to 1,100,000 shares. As a result of a stock split effected in
the form of a 50% stock dividend declared and paid in July 1995, the Plan
currently authorizes a maximum of 1,650,000 shares for issuance pursuant to the
Plan.
THE PROPOSED AMENDMENTS
The Board of Directors believes it to be in the best interest of the
Company and its shareholders to increase the number of shares available for
issuance pursuant to the exercise of options granted under the Plan. As of
January 31, 1996, there remained 76,487 shares available for issuance upon the
exercise of stock options to be granted under the Plan. At meetings on June 9,
1995 and March 5, 1996, the Board of Directors approved, subject to shareholder
approval at the 1996 Annual Meeting of Shareholders, an amendment to the Plan to
increase the number of shares available for issuance under the Plan by 1,350,000
shares, from 1,650,000 shares to 3,000,000 shares. The proposed increase in the
number of authorized shares would ensure the uninterrupted continuation of the
Plan.
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<PAGE>
A copy of the proposed amendment to the Plan is attached to this Proxy
Statement as Exhibit A and incorporated herein by reference. The Board of
Directors of the Company recommends that shareholders vote FOR the foregoing
amendment. The amendment must be approved by a majority of all votes present at
the meeting and entitled to vote on the matter.
GENERAL DESCRIPTION OF THE PLAN
The Plan is administered by the Compensation Committee of the Board of
Directors. No director who is a member of the Compensation Committee is
eligible to receive an option under the Plan. Options are awarded by the
Compensation Committee to officers and key employees of the Company who are, in
the opinion of the Committee, making significant contributions to the business
and operations of the Company. The persons eligible to receive options under
the Plan are persons employed by the Company in the capacity of officers,
regional managers, store managers and other key employees. Non-employee
directors are not eligible to receive options granted under the Plan. There are
currently approximately 350 employees eligible for participation in the Plan.
As of May 2, 1996, the market value of the common stock of the Company
underlying such options was $49.38 per share.
Under the terms of the Plan, the Compensation Committee may grant
eligible officers and employees of the Company options to purchase shares of
common stock at an exercise price not less than 100% of the fair market value of
the shares on the date the option is granted. In order to maintain the status
of options granted under the Plan as incentive stock options, options granted
under the Plan to shareholders owning 10% or more of the total combined voting
power of all classes of stock of the Company, will have an exercise price of not
less than 110% of the fair market value of the shares on the date the option is
granted. Options granted under the Plan may be exercised in accordance with a
vesting schedule set forth in individual option agreements, during the ten-year
term after the date such options were granted, and the option price may be paid
in cash or by surrendering shares of common stock, or a combination of cash and
shares of common stock, provided any such shares of common stock have been held
by the optionee for at least six months. The aggregate fair market value of
shares with respect to which incentive stock options are exercisable for the
first time by an optionee during any calendar year under all incentive stock
option plans of the Company may not exceed $100,000. Options granted under the
Plan may only be transferred by will or by the laws of descent and distribution.
During the optionee's lifetime, options are exercisable only by the optionee.
The Plan provides that the optionee may not transfer any shares obtained upon
the exercise of an option granted under the Plan until the later of two years
from the date such option was granted or one year from the date such shares are
acquired.
As of May 2, 1996, the Company had outstanding options to purchase
shares of common stock pursuant to the Plan as follows: (i) Harold Ruttenberg
(President and Chief Executive Officer): 0 shares; (ii) Robert C. Wabler
(Executive Vice President and Chief Financial Officer): 269,090 shares; (iii)
Adam J. Gilburne (Executive Vice President - Merchandising): 157,920 shares;
(iv) Don-Allen Ruttenberg (Vice President - Merchandising): 103,675 shares; (v)
Scott C. Wynne (Vice President - Administration and Secretary): 103,675 shares;
(vi) all current executive officers as a group: 634,360 shares; (vii) all
current directors who are not executive officers as a group: 0 shares; (viii)
each nominee for election as a director (Harold Ruttenberg: 0 shares; Robert C.
Wabler: 269,090 shares; Randall L. Haines: 0 shares; Michael P. Lazarus: 0
shares; Bart Starr, Sr.: 0 shares; David F. Bellet: 0 shares); and (ix) all
employees, including all current officers who are not executive officers, as a
group: 956,082 shares.
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<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
All options granted under the Plan are intended to be incentive
stock options as defined in Section 422 of the Code.
Under the provisions of Section 422 of the Code, neither the holder of
an incentive stock option nor the Company will realize income, gain, deduction
or loss upon the grant or exercise of an incentive stock option. An optionee
will be taxed only when the stock acquired upon exercise of his/her incentive
stock option is sold or otherwise disposed of in a taxable transaction. If at
the time of such sale or disposition the optionee has held the shares for two
years from the date the option was granted and for one year from the date of
exercise, the optionee will recognize long-term capital gain or loss, as the
case may be, based upon the difference between his exercise price and the net
proceeds of the sale. However, if the optionee disposes of the shares within
either of such periods, the optionee will recognize ordinary income on the date
of such disposition in an amount equal to the lesser of: (a) gain on the sale
or other disposition, or (b) the amount by which the fair market value of the
shares on the date of exercise exceeded the option exercise price, with any
excess gain being capital gain, long-term or short-term, depending on whether or
not the shares had previously been held for more than one year on the date of
sale or other taxable disposition.
The foregoing discussion and the reference to capital gain or loss
treatment therein assume that the option shares are a capital asset in the hands
of the optionee. A sale or other disposition which results in the recognition
of ordinary income to the optionee will also result in a corresponding income
tax deduction for the Company.
The Plan permits an optionee to pay all or part of the purchase price
for shares acquired pursuant to the exercise of an incentive stock option by
transferring to the Company other shares of the Company's common stock owned by
the optionee. Section 422 of the Code provides that an option will continue to
be treated as an incentive stock option even if an optionee exercises such
incentive stock option with previously acquired stock of the corporation
granting the option. Accordingly, except as noted below with respect to certain
"statutory option stock," an optionee who exercises an incentive stock option in
whole or in part by transferring to the Company shares of the Company's common
stock will recognize no gain or loss upon such exercise. The optionee's basis
in the shares so acquired will be equal to the optionee's cost basis in the
shares surrendered (plus, in the case of payment of the purchase price in a
combination of cash and surrendered shares, the amount of any cash paid).
Section 424(c)(3) of the Code provides that if "statutory option
stock" is transferred in connection with the exercise of an incentive stock
option, and if the holding period requirements under Section 422(a)(1) of the
Code are not met with respect to such statutory option stock before such
transfer, then ordinary income will be recognized as a result of the transfer of
statutory option stock. However, the incentive stock option stock acquired
through the exchange of statutory option stock will still qualify for favorable
tax treatment under Section 422 of the Code.
Incentive stock options offer two principal tax benefits: (1) the
possibility of converting ordinary income into capital gain to the extent of the
excess of fair market value over option price at the time of exercise, and (2)
the deferral of recognition of gain until disposition of the stock acquired upon
the exercise of the option.
At present, the maximum tax rate on capital gains is 28%, while the
maximum tax rate on ordinary income is 39.6%. Thus, the conversion of ordinary
income into capital gain produces some tax benefits for certain taxpayers.
However, the benefit of income deferral generally provided by incentive stock
options is reduced for some taxpayers because the excess of the fair market
value of shares acquired through the exercise of an incentive stock option over
the exercise price is taken into account in
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<PAGE>
computing an individual taxpayer's alternative minimum taxable income. Thus,
the exercise of an incentive stock option could result in the imposition of an
alternative minimum tax liability.
In general, an option granted under the Plan which is designated as an
incentive stock option will be taxed as described above. However, in some
circumstances an option which is designated as an incentive stock option will be
treated as a non-qualified stock option and the holder taxed accordingly. For
example, a change in the terms of an option which gives the employee additional
benefits may be treated as the grant of a new option. Unless all the criteria
for treatment as an incentive stock option are met on the date the "new option"
is considered granted (such as the requirement that the exercise price of the
option be not less than the fair market value of the stock as of the date
grant), the option will be treated and taxed as a non-qualified stock option.
The Plan is not qualified under Section 401(a) of the Code and is not
subject to the provisions of the Employee Retirement Income Security Act of
1974.
The preceding discussion is based upon federal tax laws and
regulations in effect on the date of this Proxy Statement, which are subject to
change, and upon an interpretation of the statutory provisions of the Code, its
legislative history and related income tax regulations. Furthermore, the
foregoing is only a general discussion of the federal income tax consequences of
the Plan and does not purport to be a complete description of all federal income
tax aspects of the Plan. Option holders may also be subject to state and local
taxes in connection with the grant or exercise of options granted under the Plan
and the sale or other disposition of shares acquired upon exercise of the
options.
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP served as the independent auditors of the
Company for the fiscal year ended January 31, 1996 and has been appointed by the
Board of Directors to continue in that capacity in fiscal 1996. A
representative of Deloitte & Touche LLP is expected to be present at the Annual
Meeting, will have an opportunity to make a statement, if desired, and will be
available to respond to appropriate questions from shareholders.
ANNUAL REPORT TO SHAREHOLDERS AND REPORT ON FORM 10-K
Additional information concerning the Company, including financial
statements of the Company, is provided in the Company's 1995 Annual Report to
Shareholders that accompanies this proxy statement. The Company's Annual Report
on Form 10-K for the year ended January 31, 1996, as filed with the Securities
and Exchange Commission, is available to shareholders who make a written request
therefor to Mr. Robert C. Wabler, at the offices of the Company, 153 Cahaba
Valley Parkway North, Birmingham, Alabama 35124. Copies of exhibits filed with
that report or referenced therein will be furnished to shareholders of record
upon request and payment of the Company's expenses in furnishing such documents.
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SHAREHOLDER PROPOSALS
Any proposal to be presented at next year's Annual Meeting must be
received at the principal executive offices of the Company not later than
January 9, 1997 directed to the attention of the Secretary, for consideration
for inclusion in the Company's proxy statement and form of proxy relating to
that meeting. Any such proposals must comply in all respects with the rules and
regulations of the Securities and Exchange Commission.
OTHER MATTERS
Management does not know of any matters to be brought before the
meeting other than those referred to above. If any other matter properly comes
before the meeting, the persons designated as proxies will vote on each such
matter in accordance with their best judgment.
By Order of the Board of Directors
/s/ Scott C. Wynne
--------------------------------------
Scott C. Wynne
Secretary
Birmingham, Alabama
May 7, 1996
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<PAGE>
EXHIBIT A
AMENDMENT NO. 3
EMPLOYEE INCENTIVE STOCK OPTION PLAN
JUST FOR FEET, INC.
WHEREAS, the Board of Directors of Just For Feet, Inc. (the "Company") has
previously adopted, and the shareholders of the Corporation have approved, the
Employee Incentive Stock Option Plan, as amended (the "Plan") pursuant to which
options to purchase stock of the Corporation may be issued to eligible
directors, officers and key employees of the Corporation; and
WHEREAS, the Board of Directors of the Corporation deems it desirable to
amend the Plan so as to increase the number of shares available for issuance
pursuant to the exercise of options granted under the Plan;
NOW, THEREFORE, the Plan is amended upon the terms, and subject to the
conditions, set forth herein:
ARTICLE I
AMENDMENT TO PLAN
1.1 Section 4 of the Plan shall be amended by deleting such section in its
entirety and substituting therefor the following:
"4. SHARES RESERVED FOR PLAN. The shares of the Corporation's $.0001 par
------------------------
value common stock (the "Common Stock") to be sold to eligible employees
under the Plan may at the election of the Board of Directors be either
treasury shares or shares originally issued for such purpose. The maximum
number of shares which shall be reserved and made available for sale under
the Plan shall be Three Million (3,000,000). Any shares subject to an
option granted hereunder which for any reason expires or is terminated
unexercised may again be subject to an option under the Plan."
ARTICLE II
EFFECTIVE DATE OF AMENDMENT
2.1 The amendment effected hereby shall be effective for options granted
under the Plan to eligible employees on or after the date this amendment is
approved by the Board of Directors of the Corporation, but subject to approval
of a majority of the shares of Common Stock of the Corporation entitled to vote
thereon represented in person and by proxy at a meeting of shareholders. In the
event shareholder approval of adoption of this amendment is not obtained within
twelve months of the date this amendment is approved by the Board of Directors
of the Corporation, then any option granted in the intervening period to
eligible employees shall be void.
A-1
<PAGE>
JUST FOR FEET, INC.
153 CAHABA VALLEY PARKWAY NORTH
BIRMINGHAM, ALABAMA 35124
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE 1996 ANNUAL MEETING OF SHAREHOLDERS.
The undersigned hereby appoints Harold Ruttenberg and Robert C. Wabler, or
either of them, with power of substitution to each, the proxies of the
undersigned to vote the Common Stock of the undersigned at the Annual Meeting of
Shareholders of JUST FOR FEET, INC. to be held on Tuesday, May 28, 1996 at 1:00
p.m. at The Wynfrey Hotel at Riverchase Galleria, 1000 Riverchase Galleria,
Birmingham, Alabama, and any adjournment thereof:
1. To elect six (6) directors for a term of one year and until their
successors are elected and have qualified.
<TABLE>
<S> <C>
[ ] FOR all nominees listed below (except [ ] WITHHOLD AUTHORITY to vote for all the nominees
as marked to the contrary below) listed below
</TABLE>
HAROLD RUTTENBERG, ROBERT C. WABLER, BART STARR, SR., MICHAEL P.
LAZARUS, RANDALL L. HAINES, DAVID F. BELLET
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE
WRITE THE NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
- - --------------------------------------------------------------------------------
2. To approve an amendment to the Company's Articles of Incorporation to
increase the number of authorized shares of stock from 25,002,667 shares to
75,000,000 shares, consisting of 70,000,000 shares of common stock and 5,000,000
shares of preferred stock, and to eliminate the authorized Series A Preferred
Stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To approve an amendment to the Company's Articles of Incorporation to
give the Board of Directors the power to fill vacancies on the Board resulting
from an increase in the number of directors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To approve an amendment to the Company's Employee Incentive Stock Option
Plan to increase the number of shares available for issuance pursuant to such
Plan from 1,650,000 shares to 3,000,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. To vote in accordance with their best judgment with respect to any other
matters that may properly come before the meeting.
<PAGE>
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" EACH OF THE ABOVE PROPOSALS AND
UNLESS INSTRUCTIONS TO THE CONTRARY ARE INDICATED IN THE SPACE PROVIDED, THIS
PROXY WILL BE SO VOTED.
Please date and sign this Proxy exactly as
name(s) appears on the mailing label.
--------------------------------------------
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Print Name(s):
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NOTE: When signing as an attorney, trustee,
executor, administrator or guardian, please
give your title as such. If a corporation
or partnership, give full name by authorized
officer. In the case of joint tenants, each
joint owner must sign.
Dated:
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