<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[X] Definitive Proxy Statement RULE 14A-6(E)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
JUST FOR FEET, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF JUST FOR FEET, INC. APPEARS HERE]
April 29, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
your Company, which will be held on Tuesday, June 1, 1999 at 10:00 a.m. Central
Time, at The Harbert Center, 2019 Fourth Avenue North, 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.
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 card 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
and Chief Executive Officer
<PAGE>
JUST FOR FEET, INC.
7400 Cahaba Valley Road
Birmingham, Alabama 35242
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 1, 1999
To the Holders of Common Stock of JUST FOR FEET, INC.:
Notice is hereby given that the Annual Meeting of Stockholders of Just For
Feet, Inc., a Delaware corporation (the "Company"), will be held at The Harbert
Center, 2019 Fourth Avenue North, Birmingham, Alabama, on Tuesday, June 1, 1999
at 10:00 a.m. Central Time for the following purposes:
(1) To elect nine directors to serve until the next annual meeting of
stockholders and until their successors have been elected and qualified;
(2) To approve an amendment to the Company's 1997 Employee Incentive Plan to
increase the number of shares available for issuance pursuant to such plan
from 2,900,000 shares to 4,000,000 shares;
(3) To approve an amendment to the Company's Non-Employee Director Stock Option
Plan to increase the number of shares available for issuance pursuant to
such plan from 281,250 shares to 400,000 shares; and
(4) To conduct such other business as may properly come before the meeting or
any adjournments or postponements thereof.
Only stockholders of record as of the close of business on April 12, 1999
will be entitled to notice of and to vote at the meeting or any adjournments or
postponements thereof.
By Order of the Board of Directors
/s/ Scott C. Wynne
Scott C. Wynne
Secretary
Birmingham, Alabama
April 29, 1999
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 STOCKHOLDERS
June 1, 1999
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PROXY STATEMENT
----------------------------------------------
This proxy statement and form of proxy, which are first being mailed to
stockholders on or about April 29, 1999, 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 Stockholders of the
Company to be held at The Harbert Center, 2019 Fourth Avenue North, Birmingham,
Alabama, on Tuesday, June 1, 1999, at 10:00 a.m. Central Time and at any or all
adjournments or postponements thereof. The address of the principal executive
offices of the Company is 7400 Cahaba Valley Road, Birmingham, Alabama 35242 and
the Company's telephone number is (205) 408-3000.
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
stockholder 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 stockholder's directions specified thereon. Where no
direction is specified, proxies will be voted FOR the election of the nominees
for director named in this Proxy Statement, FOR the amendment to the 1997
Employee Incentive Plan, FOR the amendment to the Non-Employee Director Stock
Option Plan, and, on other matters properly presented for a vote, in accordance
with the judgment of the persons acting under the proxies. Abstentions and
broker non-votes are counted as present for the purpose of determining the
presence of a quorum for the transaction of business. For the purpose of
determining the number of shares voting on a particular proposal, abstentions
are counted as shares voting, whereas broker non-votes are not counted as shares
voting.
Only stockholders of record at the close of business on April 12, 1999 will
be entitled to notice of and to vote at the Annual Meeting or any adjournments
or postponements thereof. As of April 12, 1999, the Company had outstanding
31,205,430 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 April 12, 1999 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 whose cash compensation exceeded
$100,000 for fiscal 1998 (the "Named Executive Officers"), 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)/ 5,439,730 17.4%
Pamela B. Ruttenberg/(3)/ 1,841,002 5.9
The TCW Group, Inc./(4)/ 2,789,586 8.9
Sneaker Guarantee LLC/(5)(20)/ 1,849,946 5.9
Banc One Corporation/(6)/ 1,685,944 5.4
Karl B. Friedman, as Trustee for the
Pamela B. Ruttenberg Irrevocable
Children's Trust/(7)/ 521,910 1.7
Harold and Pamela Ruttenberg Foundation 375,845 1.2
Adam J. Gilburne/(8)/ 255,576 *
Ruttenberg Family Foundation/(9)/ 137,686 *
Eric L. Tyra/(10)/ 92,000 *
Alex M. Bond /(11)/ 20,000 *
Don-Allen Ruttenberg/(12)/ 129,818 *
Scott C. Wynne/(13)/ 128,604 *
Warren Ruttenberg/(14)/ 14,375 *
Randall L. Haines/(15)/ 65,337 *
Michael P. Lazarus/(16)/ 658,549 2.1
Edward S. Croft, III /(17)/ 56,171 *
Bart Starr, Sr./(18)/ 58,310 *
David F. Bellet/(19)/ 53,100 *
Warren C. Smith, Jr./(20)/ 1,849,946 5.9
John A. Berg/(21)/ -- --
Helen Rockey/(22)/ -- --
All executive officers and
directors as a group (14 persons)/(23)/ 8,801,516 27.6%
</TABLE>
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* Less than 1%.
-2-
<PAGE>
/(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 which are exercisable within 60 days of April 12,
1999 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
3,085,197 shares owned directly by Harold Ruttenberg, 1,841,002 shares
held by him as Trustee under a Voting Trust Agreement for the benefit of
Pamela B. Ruttenberg which terminates in 2003, 375,845 shares held by the
Harold and Pamela Ruttenberg Foundation and 137,686 shares held by the
Ruttenberg Family Foundation. Mr. Ruttenberg serves on the Board of
Directors of each of such foundations and in such capacity shares voting
and investment power with respect to shares owned by such foundations.
Mr. Ruttenberg's address is 7400 Cahaba Valley Road, Birmingham, Alabama
35242.
/(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 7400 Cahaba Valley Road, Birmingham, Alabama
35242.
/(4)/ Based on a Schedule 13G dated February 12, 1999 filed by the TCW Group,
Inc. ("TCW"). The Schedule 13G reports that Robert Day may be deemed to
control TCW and, as a result, may be deemed to beneficially own the
shares of common stock owned by TCW. The Schedule 13G also reports that
the shares are held by subsidiaries or other affiliates of TCW or Robert
Day. The Company makes no representation as to the accuracy or
completeness of the information reported. The business address of TCW is
865 South Figueroa Street, Los Angeles, California 90017 and the business
address of Robert Day is 200 Park Avenue, Suite 2000, New York, New York
10166.
/(5)/ Includes presently exercisable warrants to purchase 923,591 shares of
Common Stock.
/(6)/ Based on a Schedule 13G/A dated February 1, 1999 filed by Banc One
Corporation ("Banc One") as a parent bank holding company for several
subsidiary commercial banks. The Schedule 13G/A states that of the
1,685,944 shares beneficially owned, Banc One has sole voting power with
respect to 1,675,604 shares, sole dispositive power with respect to
1,660,292 shares and shared dispositive power with respect to 18,002
shares. The Company makes no representation as to the accuracy or
completeness of the information reported. Banc One's business address is
One First National Plaza, Chicago, Illinois 60670.
/(7)/ Trust is for the benefit of the three adult children of Harold and Pamela
Ruttenberg, two of whom, Warren Ruttenberg and Don-Allen Ruttenberg, are
executive officers of the Company. 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.
/(8)/ Includes 128,385 shares subject to outstanding options to purchase Common
Stock which are exercisable within 60 days. Excludes 236,250 shares
subject to outstanding options to purchase Common Stock which will become
exercisable at various dates in the future. On April 27, 1999, Mr.
Gilburne submitted his resignation from all positions with the Company,
effective May 31, 1999.
/(9)/ 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 such Foundation.
/(10)/ Represents shares subject to outstanding options to purchase Common Stock
which are exercisable within 60 days. Excludes 158,000 shares subject to
outstanding options to purchase Common Stock which will become
exercisable at various dates in the future.
/(11)/ Represents shares subject to outstanding options to purchase Common Stock
which are exercisable within 60 days. Mr. Bond resigned from the Company
on February 28, 1999.
/(12)/ Includes 40,479 shares subject to outstanding options to purchase Common
Stock which are exercisable within 60 days. Excludes 115,000 shares
subject to outstanding options to purchase Common Stock which will become
exercisable at various dates in the future.
/(13)/ Includes 80,958 shares subject to outstanding options to purchase Common
Stock which are exercisable within 60 days. Excludes 115,000 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 24,375 shares subject to
outstanding options to purchase common stock which will become
exercisable at various dates in the future.
/(15)/ Includes 65,000 shares subject to outstanding options to purchase Common
Stock which are exercisable within 60 days. Excludes 2,500 shares subject
to outstanding options to purchase Common Stock which will become
exercisable at various dates in the future.
/(16)/ Includes 65,000 shares subject to outstanding options to purchase Common
Stock which are exercisable within 60 days. Excludes 2,500 shares subject
to outstanding options to purchase Common Stock which will become
exercisable at various dates in the future. Also includes 593,549 shares
held by Weston Presidio Capital II, L.P. Mr. Lazarus is a general partner
of a limited partner of the partnership that owns the shares and may be
deemed to share beneficial ownership of such shares.
/(17)/ Includes 55,000 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.
/(18)/ Includes 44,750 shares subject to outstanding options to purchase Common
Stock which are exercisable within 60 days. Excludes 66,500 shares
subject to outstanding options to purchase Common Stock which will become
exercisable at various dates in the future.
/(19)/ Includes 42,500 shares subject to outstanding options to purchase Common
Stock which are exercisable within 60 days and an aggregate of 600 shares
owned by Mr. Bellet's two daughters, with respect to which shares Mr.
Bellet disclaims beneficial ownership. Excludes 2,500 shares subject to
outstanding options to purchase Common Stock which will become
exercisable at various dates in the future.
/(20)/ Mr. Smith was appointed to the Board of Directors upon the acquisition on
July 2, 1998 by Sneaker Guarantee LLC of the securities referred to in
this note. The number of shares shown as beneficially owned by Mr. Smith
includes 926,355 shares of Common Stock and 923,591 shares underlying
warrants to purchase Common Stock owned by Sneaker
-3-
<PAGE>
Guarantee LLC. Mr. Smith serves as a vice president of the general
partner of a limited partnership which is the manager of Sneaker
Guarantee LLC and as such may be deemed to beneficially own such
securities.
/(21)/ Mr. Berg is a nominee for election as a director at the 1999 Annual
Meeting.
/(22)/ Excludes 600,000 shares subject to outstanding options to purchase common
stock which will become exercisable at various dates in the future. Ms.
Rockey is a nominee for election as a director at the 1999 Annual
Meeting.
/(23)/ Includes outstanding options to purchase an aggregate of 628,447 shares
of Common Stock held by executive officers and directors which are
exercisable within 60 days. Excludes 1,650,125 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.
PROPOSAL 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 nine, 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 stockholders and until their successors are elected and
qualified. Directors will be elected by a plurality of the votes of shares
present in person or by proxy entitled to vote on the election of directors.
Abstentions and broker non-votes will have no effect on the outcome of the
election of directors.
The following persons have been nominated by management for election to the
Board of Directors:
Harold Ruttenberg, age 56, is the founder of the Company and has served as
its Chairman and Chief Executive Officer since its inception in 1977. Mr.
Ruttenberg also served as President from the Company's inception to March 1999.
Bart Starr Sr., age 65, 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 43, 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. Mr. Lazarus also serves as a director of Guitar
Center, Inc. and Restoration Hardware, Inc.
Randall L. Haines, age 56, 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.
-4-
<PAGE>
David F. Bellet, age 52, has served as a director of the Company since May
1996. Mr. Bellet 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.
Edward S. Croft, III, age 56, has served as a director of the Company since
July 1996. Mr. Croft has been a principal in the Atlanta, Georgia investment
banking firm of Croft & Bender LLC since August 1996. From April 1996 to August
1996, Mr. Croft was President of Croft & Co., a financial advisory firm. From
May 1971 through April 1996, Mr. Croft was an investment banker with The
Robinson-Humphrey Company, Inc. Mr. Croft also serves on the Board of Directors
of Artesyn Technologies, Inc.
Warren C. Smith, Jr., age 42, has served as a director of the Company since
July 1998. Mr. Smith is a Managing Director of Thomas H. Lee Company ("THL")
and has been employed by THL since 1990. Mr. Smith also serves as a director of
Eye Care Centers of America, Inc., Finlay Enterprises, Inc. and Rayovac
Corporation. In addition, Mr. Smith serves as a Vice President of Thomas H. Lee
Advisors I and T. H. Lee Mezzanine II, affiliates of M.L.-Lee Acquisition Fund,
L.P. and M.L.-Lee Acquisition Fund II (Retirement Account), L.P., respectively,
which are THL affiliates. Mr. Smith was appointed to the Board of Directors in
July 1998 pursuant to an agreement with a THL affiliate in connection with its
investment in the Company.
Helen Rockey, age 43, was appointed President and Chief Operating Officer of
the Company in March 1999. Prior to joining the Company, Ms. Rockey served as
President and Chief Executive Officer of Brooks Sports, Inc., a worldwide
athletic footwear, apparel and accessories company, since 1994. For 11 years
prior to joining Brooks, Ms. Rockey worked in a variety of positions with Nike,
Inc.
John A. Berg, age 37, has been managing partner at Dorset Capital Management
since December 1998. From 1988 to 1998, Mr. Berg was an investment banker with
NationsBank Montgomery Securities, most recently holding the title of Senior
Managing Director.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF
THE NOMINEES FOR DIRECTOR NAMED IN THIS PROXY STATEMENT.
Committees of the Board and Meetings
The Company's Board of Directors presently has the following standing
committees:
(A) The Audit Committee, which is comprised of Messrs. Lazarus and Haines.
The Audit Committee, which met one time in fiscal 1998, 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, which is comprised of Messrs. Starr, Bellet
and Croft. The Compensation Committee is responsible for establishing the
salaries, bonuses and other compensation of the executive officers of the
Company. The Compensation Committee did not meet in person during fiscal 1998.
(C) The Stock Option Committee which is comprised of Messrs. Lazarus and
Bellet. The Stock Option Committee is authorized to administer the Company's
stock option plans along with the full Board of Directors. The Stock Option
Committee did not meet during fiscal 1998, all stock option decisions being made
by the full Board of Directors.
-5-
<PAGE>
The Company does not have a Directors Nominating Committee, that function
being reserved to the entire Board of Directors.
During fiscal 1998, the Board of Directors held a total of four meetings and
acted 29 times by unanimous written consent (mostly with respect to grants of
stock options). 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.
Section 16(a) Beneficial Ownership Reporting Compliance
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% stockholders 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 1998, all Section 16(a) filing requirements
applicable to its officers, directors and greater than 10% stockholders were
complied with.
EXECUTIVE COMPENSATION
The following table provides certain summary information concerning
compensation paid or accrued by the Company for fiscal 1998, 1997 and 1996 to or
on behalf of the Company's Chief Executive Officer and the Named Executive
Officers.
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 1998 $402,544 -- -- -- --
Chairman, President and 1997 400,000 -- -- --
Chief Executive Officer 1996 382,052 -- $17,650/(1)/ --
Adam J. Gilburne/(2)/ 1998 $300,000 -- -- -- $ 923/(3)/
Executive Vice President; 1997 271,153 -- -- 200,000 shares/(4)/
President-Superstore 1996 198,077 $ 50,000 -- 100,000 shares
Division
Don-Allen Ruttenberg 1998 $163,007 -- -- -- $1,196/(3)/
Executive Vice President - 1997 123,692 -- -- 100,000 shares/(4)/
New Store Development 1996 100,000 -- -- 100,000 shares
Scott C. Wynne 1998 $163,007 $100,000 -- -- $1,196/(3)/
Executive Vice President - 1997 123,692 -- -- 100,000 shares/(4)/
Operations and Secretary 1996 100,000 -- -- 100,000 shares
Alex M. Bond/(5)/ 1998 $223,077 -- -- 50,000 shares --
Executive Vice President- 1997 210,232 -- $20,574/(6)/ 200,000 shares
Strategic Development
Eric L. Tyra/(7)/ 1998 $294,297 -- $65,000/(8)/ -- $2,531/(3)/
Executive Vice President 1997 177,075 -- 25,043/(6)/ 250,000 shares
and Chief Financial Officer
</TABLE>
-6-
<PAGE>
- ------------
/(1)/ Represents premiums paid by the Company for term life insurance on behalf
of the Named Executive Officer.
/(2)/ On April 27, 1999, Mr. Gilburne submitted his resignation from all
positions with the Company, effective May 31, 1999.
/(3)/ Represents matching contributions paid by the Company under the Company's
401(k) plan.
/(4)/ Includes options to purchase 100,000 shares that were repriced (by
cancellation and regrant) in fiscal 1997 from options originally granted
in fiscal 1996.
/(5)/ Mr. Bond joined the Company in February 1997 and resigned on February 28,
1999.
/(6)/ Represents amounts paid for moving and temporary living expenses
associated with the officer's relocation to Birmingham, Alabama upon
joining the Company.
/(7)/ Mr. Tyra joined the Company in May 1997.
/(8)/ Represents amounts paid for relocation costs and expenses relating to the
sale of Mr. Tyra's former residence.
Employment and Noncompetition Agreements
On January 8, 1998, the Company entered into an employment agreement with
Adam J. Gilburne. The agreement, which expires on January 7, 2003, provides that
Mr. Gilburne will serve as President, Superstore Division of the Company and
receive an annual base salary of $300,000. The agreement provides that Mr.
Gilburne is eligible to receive a performance-based bonus of up to 50% of his
annual salary. He also received an incentive stock option to purchase 100,000
shares of Common Stock at $12.94 per share. In the event of the termination of
his employment following a Change in Control of the Company (as defined in the
agreement), Mr. Gilburne is entitled, subject to certain conditions, to receive
a lump sum cash payment equal to two times the base salary then in effect under
the agreement plus any awarded but unpaid bonus. Mr. Gilburne's employment
agreement contains covenants of non-disclosure and non-competition. On April
27, 1999, Mr. Gilburne submitted his resignation from all positions with the
Company, effective May 31, 1999.
On November 6, 1996, the Company entered into an employment agreement with
Alex M. Bond. The agreement, which expired January 31, 1999, provided that Mr.
Bond would serve as Executive Vice President - Strategic Development of the
Company at an annual salary of $150,000, plus a $50,000 per year living
allowance. The agreement provided that Mr. Bond was eligible to receive a
performance-based bonus of up to $200,000 per year. Pursuant to the agreement,
Mr. Bond was granted an incentive stock option to purchase 200,000 shares of the
Company's Common Stock at $14.50 per share. Mr. Bond's employment agreement
contained covenants of non-disclosure and non-competition. Mr. Bond resigned
from the Company on February 28, 1999 and, as a result, has forfeited unvested
options to purchase 180,000 shares of Common Stock.
On May 1, 1997, the Company entered into an employment agreement with Eric
L. Tyra. The agreement, which expires May 18, 2002, provides that Mr. Tyra will
serve as Executive Vice President and Chief Financial Officer of the Company at
an annual salary of $250,000, plus a $35,000 per year living allowance. The
agreement provides that Mr. Tyra is eligible to receive a performance-based
bonus of up to $125,000 per year. In addition, the agreement provides that Mr.
Tyra shall receive a bonus of $500,000 in the event he is employed by the
Company on May 18, 2002 or if he has been terminated prior to such date
otherwise than "for cause" (as defined in the agreement). Pursuant to the
agreement, Mr. Tyra was granted an incentive stock option to purchase 200,000
shares of the Company's Common Stock at $17.00 per share. In the event of the
termination of his employment following a Change in Control of the Company (as
defined in the agreement), Mr. Tyra is entitled, subject to certain conditions,
to receive a lump sum cash payment equal to two times the base salary then in
effect under the agreement plus any awarded but unpaid bonus. Mr. Tyra's
employment agreement contains covenants of non-disclosure and non-competition.
-7-
<PAGE>
Options
The following table provides information regarding option grants in fiscal
1998 to the Named Executive Officers:
<TABLE>
<CAPTION>
Option Grants in Fiscal 1998
Individual Grants
-------------------------------------------------------
% of Total Potential Realizable Value
Number of Options At Assumed Annual Rates
Securities Granted to of Stock Price
Underlying Employees in Exercise Appreciation for Option
Options Fiscal Price/(2)/ Expiration Term /(3)/
Name Granted (#) Year/(1)/ ($/Share) Date 5% 10%
- ---- ----------- ------------ ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Harold Ruttenberg.......... -- -- -- -- -- --
Adam J. Gilburne........... -- -- -- -- -- --
Don-Allen Ruttenberg....... -- -- -- -- -- --
Scott C. Wynne............. -- -- -- -- -- --
Eric L. Tyra............... -- -- -- -- -- --
Alex M. Bond/(4)/.......... 50,000 4.9% $12.72 9/30/08 $399,977 $1,013,620
</TABLE>
- ------------
/(1)/ The Company granted options to purchase an aggregate of 1,015,000 shares
to employees in the year ended January 30, 1999.
/(2)/ Stock options were granted with an exercise price equal to the fair market
value of the Company's Common Stock on the date of grant.
/(3)/ The dollar amounts under these columns represent the potential realizable
value of each grant of options assuming that the market price of the
Company's Common Stock appreciates in value from the date of grant at the
5% and 10% annual rates prescribed by the Securities and Exchange
Commission and therefore are not intended to forecast possible future
appreciation, if any, of the price of the Company's Common Stock.
/(4)/ Upon his resignation from the Company on February 28, 1999, Mr. Bond
forfeited all rights to the options shown in the table.
The following table provides information regarding the value of options
outstanding at January 30, 1999. No options were exercised by the Named
Executive Officers during fiscal 1998
-8-
<PAGE>
<TABLE>
<CAPTION>
Fiscal Year-End Option Values
Number of Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Options
at Fiscal Year End at Fiscal Year End
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ------------------------------- -------------------------
<S> <C> <C>
Harold Ruttenberg.......... -- --
Adam J. Gilburne/(1)/...... 108,385/256,250 $1,175,977/$580,875
Don-Allen Ruttenberg....... 40,479/115,000 $ 438,037/$118,300
Scott C. Wynne............. 80,958/115,000 $ 876,082/$118,300
Eric L. Tyra............... 56,000/194,000 $ 0/$103,000
Alex M. Bond /(2)/......... 20,000/0 $ 10,000/$0
</TABLE>
- ------------
(1) On April 27, 1999, Mr. Gilburne submitted his resignation from all positions
with the Company, effective May 31, 1999.
(2) Mr. Bond resigned from the Company on February 28, 1999.
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") currently reserves 281,250 shares of Common Stock for issuance pursuant
to the exercise of options granted under such plan. The Company is proposing to
amend the Directors Plan at the 1999 Annual Meeting to increase the number of
shares reserved for issuance under such plan to 400,000 shares. See "Proposal
Three: Amendment to Directors Plan." The Directors Plan provides for an initial
one-time grant of options to purchase 25,000 shares to all non-employee
directors upon becoming a director (with the exception of Messrs. Bart Starr and
Warren C. Smith, Jr.). In addition, the Directors Plan provides that each year
on the first day of the Company's fiscal year, each then non-employee director
automatically will be 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
Mr. Bart Starr served as a member of the Compensation Committee in fiscal
1998. On August 22, 1997, the Company and Bart Starr entered into a Personal
Services Agreement providing for certain public relations and advertising
efforts to be performed by Mr. Starr on behalf of the Company. Pursuant to the
agreement, Mr. Starr agreed to make personal appearances on behalf of the
Company and to provide "spokesman" services for the Company in certain
advertisements. In consideration of such services, the Company granted Mr.
Starr an option to purchase 100,000 shares of Common Stock at an exercise price
of $12.78 (fair market value of the Common Stock on the date of the grant). The
Personal Services Agreement had an initial term of one year but renews
automatically for successive one-year periods unless either the Company or Mr.
Starr gives at least 30 days notice of an intention to terminate the agreement.
-9-
<PAGE>
Management believes that the above transaction was entered into on terms no
less favorable to the Company than could have been obtained from unaffiliated
third parties at the time such transaction was negotiated.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For information regarding transactions between the Company and Bart Starr,
see "Compensation Committee Interlocks and Insider Participation."
During the period from February 1, 1994 through January 1, 1997, the
Company made advances totaling $183,000 to Mr. Harold Ruttenberg, Chairman and
Chief Executive Officer of the Company, for certain personal expenses. Mr.
Ruttenberg has agreed to repay such amount to the Company without interest.
Mr. Randall L. Haines, a director of the Company, is president of Compass
Bank - Birmingham. During fiscal 1998, the Company had a revolving line of
credit of Compass Bank, pursuant to which the Company could borrow up to $40.0
million for general corporate purposes. During the year, this line of credit
was increased to $133.0 million, with NationsBank, N.A. extending the additional
$93.0 million of credit. Amounts outstanding under the line of credit bore
interest at a floating rate above LIBOR and were unsecured. The largest amount
outstanding under the line of credit during fiscal 1998 was $133.0 million. On
December 10, 1998, the Company repaid all amounts under the line of credit,
which was then terminated. The line of credit was replaced by the Company's
current $200.0 million revolving credit facility led by NationsBank, N.A. and in
which several banks, including Compass Bank, participate (the "Revolving Credit
Facility"). The maximum amount of Compass Bank's participation in the Revolving
Credit Facility is $25 million.
On November 19, 1997, the Company loaned $165,000 to Eric L. Tyra,
Executive Vice President and Chief Financial Officer of the Company, to help
defray the cost of purchasing a home related to his relocation to Birmingham,
Alabama upon joining the Company. The largest amount outstanding on such loan
during fiscal 1998 was $176,167. The loan bore interest at 5.79% per annum and
was due and payable immediately upon the sale of Mr. Tyra's former home. Mr.
Tyra repaid the loan in full on April 22, 1999.
In connection with the Company's July 2, 1998 acquisition of Sneaker
Stadium, Inc., the Company paid aggregate fees of $750,000 to two companies
affiliated with Thomas H. Lee Company ("THL"), the former majority shareholder
of Sneaker Stadium. Warren C. Smith, Jr., who became a director of the Company
upon the closing of such acquisition, is a Managing Director of THL. The fees
were paid for financial advisory services rendered in connection with the
transaction.
During fiscal 1998, the Company engaged in several transactions involving
NationsBank, N.A. and its affiliate NationsBanc Montgomery Securities LLC. John
A. Berg, a nominee for election as a director of the Company, was a Senior
Managing Director of NationsBanc Montgomery Securities until December 1998. In
connection with the Company's acquisition of Sneaker Stadium, the Company
incurred financial advisory fees of $375,000 to NationsBanc Montgomery
Securities. In addition, NationsBank, N.A. participated in the $133.0 million
line of credit and is the lead bank in the Revolving Credit Facility, each of
which is discussed above with respect to Mr. Haines.
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.
-10-
<PAGE>
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 Stockholder 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 three
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 stockholders 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 Board of Directors. The Board may
take into account 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 Compensation Committee believes that providing executives with the
opportunities to acquire significant stakes in the growth and prosperity of the
Company (through grants of stock options), while maintaining other elements of
the Company's compensation program at conservative levels, will enable the
Company to attract and retain executives with the outstanding management
abilities and entrepreneurial spirit which are essential to the Company's
ongoing success. Furthermore, the Compensation Committee believes that this
approach to compensation motivates executives to perform to their full
potential.
At least annually, the Compensation Committee reviews salary
recommendations for the Company's executives (other than the Chief Executive
Officer) and then approves such recommendations, with any modifications it has
deemed appropriate. The annual salary recommendations are based on peer group
and national industry surveys of total compensation packages, as well as
evaluations of the individual executive's past and expected future performance.
Similarly, the Compensation Committee fixes the base salary of the Chief
Executive Officer based on a review of competitive compensation data, the Chief
Executive Officer's overall compensation package, and the Compensation
Committee's assessment of his past performance and its expectation as to his
future performance in leading the Company. The Compensation Committee believes
that, generally, such salaries have been commensurate with those paid to
executives with comparable qualifications, experience and responsibilities at
other similarly situated companies.
-11-
<PAGE>
The Compensation Committee also determines, based upon the recommendation
of the Chief Executive Officer, the annual bonus, if any, to be paid to
executive officers (other than the Chief Executive Officer). The amount of each
individual bonus is determined based upon an evaluation of such factors as
individual performance, increases in the Company's revenue, net income, net
income per share and market penetration, as well as improvements in operating
efficiencies. The assessment of performance achievement is considered in
relation to the maximum normal bonus opportunity, which is paid for achieving
outstanding levels of performance. The Compensation Committee applies similar
criteria in setting the amount of annual bonus, if any, earned by the Chief
Executive Officer. Despite such authority, the Compensation Committee
historically has not awarded bonuses, and, if awarded, such bonuses have been
below levels paid to executives with comparable qualifications, experience and
responsibilities at other similarly situated companies.
Stock options represent a substantial portion of compensation for the
Company's executive officers, other than the Chief Executive Officer. Stock
options generally are granted at the prevailing market price on the date of
grant, and will only have value if the Company's stock price increases.
Generally, grants vest in equal amounts over a period of five years (although
certain grants may vest either immediately or over a shorter period) and
executives generally must be employed by the Company at the time of vesting in
order to exercise the options. Grants of stock options generally are based upon
the level of the executive's position with the Company and an evaluation of the
executive's past and expected future performance. The Compensation Committee
believes that dependence on stock options for a significant portion of
executives' compensation more closely aligns such executives' interests with
those of the Company's stockholders, since the ultimate value of such
compensation is linked directly to stock price.
The fiscal 1998 compensation of Harold Ruttenberg, who served as President
and Chief Executive Officer, was set by the Compensation Committee at $400,000
(reflecting no increase from fiscal 1997), 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 1998.
In approving the compensation paid to Mr. Ruttenberg in fiscal 1998, the
Compensation Committee considered the following factors:
(i) the reasonableness of Mr. Ruttenberg's salary in amount relative to the
chief executive officers of similarly placed public companies; and
(ii) 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.
The Compensation Committee continually evaluates the Company's compensation
policies and procedures with respect to executives. Although the Compensation
Committee believes that current compensation policies have been successful in
aligning the financial interests of executive officers with those of the
Company's stockholders and with Company performance, it continues to examine
what modifications, if any, should be implemented to further link executive
compensation with both individual and Company performance.
Bart Starr
Edward S. Croft, III
David F. Bellet
-12-
<PAGE>
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total stockholder return on the Company's Common Stock against
the cumulative total returns of the Nasdaq Market Index and the Nasdaq Retail
Index during the five-year period commencing March 9, 1994 (the date the
Company's Common Stock commenced trading on the Nasdaq National Market) and
ending January 30, 1999. 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]
<TABLE>
<CAPTION>
March 9, January 31, January 31, January 31, January 31, January 30,
1994 1995 1996 1997 1998 1999
-------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Just For Feet, Inc. ....... $100.00 $192.93 $458.83 $651.99 $314.95 $331.52
Nasdaq Market Index........ $100.00 $ 93.66 $131.13 $172.57 $203.27 $317.24
Nasdaq Retail Index........ $100.00 $ 95.66 $108.11 $132.96 $155.59 $189.49
</TABLE>
-13-
<PAGE>
PROPOSAL TWO:
AMENDMENT TO
1997 EMPLOYEE INCENTIVE PLAN
On May 14, 1997, the Board of Directors of the Company adopted, subject to
the approval of the Company's stockholders, the Just For Feet, Inc. 1997
Employee Incentive Plan for eligible directors, officers, employees, consultants
and advisors of the Company and its subsidiaries. The Company's stockholders
approved the plan on June 24, 1997 and the Board of Directors subsequently
amended and restated the plan to effect certain technical amendments (the plan,
as amended and restated, is referred to as the "Plan"). On August 17, 1998, the
stockholders of the Company approved an amendment to the Plan to increase the
number of shares reserved for issuance under the plan from 1,400,000 shares to
2,900,000 shares. The purpose of the Plan is to enable the Company to attract
and retain quality employees and to allow such employees to participate in the
long-term growth of the Company. There are currently six directors, 13 officers
and approximately 1,500 employees, consultants and advisors eligible for
participation, in the Plan. The Plan provides for incentive awards in the form
of (i) incentive stock options, (ii) non-qualified stock options, (iii) stock
appreciation rights ("SARs"), (iv) restricted stock, or (v) performance awards
of stock, cash or a combination of stock and cash. The Plan currently
authorizes a maximum of 2,900,000 shares for issuance pursuant to awards made
under the Plan.
The Proposed Amendment
The Board of Directors believes it to be in the best interest of the
Company and its stockholders to increase the number of shares available for
issuance pursuant to awards made under the Plan. On March 18, 1999, the Board
of Directors approved, subject to stockholder approval at the 1999 Annual
Meeting, an amendment to the Plan to increase the number of shares available for
issuance under the Plan by 1,100,000 shares, from 2,900,000 shares to 4,000,000
shares. The Company's rapid growth since the adoption of the Plan has resulted
in the grant of awards covering nearly all of the shares of Common Stock
available under the Plan. As of April 12, 1999, there remained only 185,650
shares available for issuance under the Plan. The proposed increase in the
number of authorized shares would ensure the uninterrupted continuation of the
Plan as the Company continues its expansion.
A copy of the proposed amendment to the Plan is attached to this Proxy
Statement as Exhibit "A" and is incorporated herein by reference. The Board of
Directors of the Company recommends that stockholders vote FOR the foregoing
amendment. The amendment must be approved by a majority of the shares present
in person or by proxy at the meeting and entitled to vote on the matter.
Description of the Plan
Shares Reserved for the Plan. The shares of the Company's Common Stock to
----------------------------
be awarded to eligible participants under the Plan may be made available either
from authorized and unissued shares or treasury shares. The maximum number of
shares currently reserved and made available for distribution under the Plan is
2,900,000. If for any reason shares of stock awarded or subject to purchase by
exercising an option under the Plan are not delivered or are reacquired by the
Company, such shares may again be available for award under the Plan.
Incentive Awards. All Awards. The Plan authorizes the Board of Directors
----------------
or Stock Option Committee to award eligible participants incentive stock
options, non-qualified stock options, stock appreciation rights, restricted
stock, performance awards or any combination thereof (collectively referred to
as "Awards"). Each Award granted under the Plan will be represented by an Award
Agreement in a form approved by the Board of Directors or Stock Option
Committee. The Award Agreement shall be subject to and incorporate the terms
and conditions required under the Plan or as required by the Board of Directors
-14-
<PAGE>
or Stock Option Committee for the form of the Award granted and such other terms
and conditions as the Board of Directors or Stock Option Committee may specify.
Stock Options. The Plan authorizes the Board of Directors or Stock Option
Committee to grant eligible participants incentive and non-qualified options to
purchase shares of Common Stock. In the case of incentive stock options, the
exercise price must be at least 100 percent of the fair market value of the
shares on the date the option is granted. Options granted under the Plan may be
exercised according to a prescribed vesting schedule during the period of ten
years after the date the options were granted. The option price may be paid in
cash or such other consideration as the Board of Directors or Stock Option
Committee deems appropriate, including stock already owned by the optionee, or,
with respect to nonqualified options, restricted stock, or a combination of cash
and such other consideration having a total fair market value equal to the
purchase price. 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.
Stock Appreciation Rights. SARs may be granted under the Plan in
conjunction with stock options or in tandem with stock options granted under the
Plan, or may be granted alone. SARs granted in conjunction or in tandem with
stock options generally are exercisable only at such time and to the extent that
the stock options to which they relate are exercisable. Upon exercise of an
SAR, a participant shall be entitled to receive an amount in cash or shares of
Common Stock equal in value to the excess of the fair market value of one share
of stock over the exercise price per share specified in the related option or
SAR, multiplied by the number of shares in respect of which the SAR is
exercised.
Restricted Stock. Shares of restricted stock may be issued either alone or
in addition to other awards granted under the Plan. The grant of restricted
stock may be conditioned upon the attainment of specified performance goals.
Recipients of restricted shares have the right to vote the shares and receive
dividends on such shares, but are not permitted to transfer such shares until
termination of all restrictions or six months after the date of the award.
Administration of the Plan. The Plan is administered by the Board of
--------------------------
Directors or the Stock Option Committee, which committee must consist of two or
more non-employee directors.
Amendment and Termination of the Plan. The Board of Directors may amend,
-------------------------------------
alter or discontinue the Plan, but no amendment, alteration or discontinuation
may be made which would impair the right of an optionee or participant under a
stock option, SAR, restricted stock or performance award, without the optionee's
or participant's consent, or which, without the approval of the stockholders of
the Company would: (i) increase the total number of shares reserved under the
Plan or (ii) change the category or class of employees eligible to receive
Incentive Stock Options under the Plan. The Company's Board of Directors may
also suspend the granting of options pursuant to the Plan at any time and may
terminate the Plan at any time; provided, however, no such suspension or
termination shall modify or amend any option granted before such suspension or
termination unless the affected participant consents in writing to such
modification or amendment or there is a dissolution or liquidation of the
Company.
Outstanding Options Under the Plan
As of April 12, 1999, the Company had outstanding options under the Plan,
to purchase an aggregate of 2,714,350 shares of Common Stock. On April 12,
1999, the market value of the Company's Common Stock was $11.13 per share and
the aggregate market value of the Common Stock underlying such options was
$30,210,716. The following table indicates the amount of options held by the
(i) Named Executive Officers; (ii) all current executive officers as a group;
(iii) all current directors who are not executive officers as a group; (iv) each
nominee for election as director; and (v) all employees, including all current
officers who are not executive officers, as a group:
-15-
<PAGE>
<TABLE>
<CAPTION>
Number of Shares
Name Position Underlying Option
---- -------- -----------------
<S> <C> <C>
Harold Ruttenberg Chairman, President and Chief Executive Officer 0
Eric L. Tyra Executive Vice President and Chief Financial Officer 50,000
Adam J. Gilburne Executive Vice President; President Superstore Division 100,000
Alex M. Bond Former Executive Vice President - Strategic 0
Development
Don-Allen Ruttenberg Executive Vice President 0
Scott C. Wynne Executive Vice President - Operations and Secretary 0
Bart Starr Sr. Director 100,000
Michael P. Lazarus Director 0
Randall L. Haines Director 0
David F. Bellet Director 0
Edward S. Croft, III Director 0
Warren C. Smith, Jr. Director 0
Helen Rockey Director Nominee 600,000
John A. Berg Director Nominee 0
All current directors who
are not executive officers
as a group.................................................................................. 100,000
All executive officers as
a group..................................................................................... 1,050,000
All employees,
including all current
officers who are not
executive officers, as a
group....................................................................................... 1,564,250
</TABLE>
Federal Income Tax Consequences
Incentive Stock Options. All incentive stock options granted or to be
-----------------------
granted under the Plan which are designated as incentive stock options are
intended to be incentive stock options as defined in Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").
Under the provisions of Section 422 of the Code, neither the holder of an
incentive stock option nor the Company will recognize 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 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 the
required holding period (two years from the date the option was granted and one
year from the date of the transfer of the shares to the optionee), 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 before the end of such holding
period, the optionee will recognize ordinary income on such disposition in an
amount equal to the lesser of:
-16-
<PAGE>
(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 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.
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 long-term capital gains (i.e., for
property held for more than 12 months) is 20%, while the maximum tax rate on
ordinary income is 39.6%. Thus, the conversion of ordinary income into capital
gain produces some tax benefit for certain taxpayers. However, the benefit of
income deferral generally provided by incentive stock options is reduced for
some taxpayers since 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 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 of the
grant), the option will be treated and taxed as a non-qualified stock option.
-17-
<PAGE>
Non-Qualified Stock Options. All options granted or to be granted under
---------------------------
the Plan which do not qualify as incentive stock options are non-statutory
options not entitled to special tax treatment under Section 422 of the Code.
A participant in the Plan will recognize taxable income upon the grant of a
non-qualified stock option only if such option has a readily ascertainable fair
market value as of the date of the grant. In such a case, the recipient will
recognize taxable ordinary income in an amount equal to the excess of the fair
market value of the option as of such date over the price, if any, paid for such
option. No income would then be recognized on the exercise of the option, and
when the shares obtained through the exercise of the option are disposed of in a
taxable transaction, the resulting gain or loss would be capital gain or loss
(assuming the shares are a capital asset in the hands of the optionee).
However, under the applicable Treasury Regulations, the non-qualified stock
options issued under the Plan will not have a readily ascertainable fair market
value unless at the time such options are granted similar options of the Company
are actively traded on an established market. The Company presently has no such
actively traded options.
Upon the exercise of a non-statutory option not having a readily
ascertainable fair market value, the optionee recognizes ordinary income in an
amount equal to the excess of the fair market value of the shares on the date of
exercise over the option exercise price for those shares. The Company is not
entitled to an income tax deduction with respect to the grant of a non-statutory
stock option or the sale of stock acquired pursuant thereto. The Company
generally is permitted a deduction equal to the amount of ordinary income the
optionee is required to recognize as a result of the exercise of a non-statutory
stock option.
The Plan permits the Committee to allow an optionee to pay all or part of
the purchase price for shares acquired pursuant to an exercise of a non-
statutory option by transferring to the Company other shares of the Company's
Common Stock owned by the optionee. If an optionee exchanges previously
acquired Common Stock pursuant to the exercise of a non-qualified stock option,
the Internal Revenue Service has ruled that the optionee will not be taxed on
the unrealized appreciation of the shares surrendered in the exchange. In other
words, the optionee is not taxed on the difference between his or her cost basis
for the old shares and their fair market value on the date of the exchange, even
though the previously acquired shares are valued at the current market price for
purposes of paying all or part of the option price.
SARs and Performance Awards. On the exercise of an SAR or the receipt by a
---------------------------
Plan participant of a payment with respect to a Performance Award, the
participant generally will recognize taxable ordinary income in an amount equal
to the sum of the cash and the fair market value of the stock (determined as of
the date of exercise of the SAR, or the date of receipt of a payment with
respect to the Performance Award, whichever is applicable), if any, received.
However, the amount of ordinary income recognized and the timing of the
recognition of that income may be different if the Plan participant receives
stock with respect to which there is a substantial risk of forfeiture (such as
Restricted Stock) in connection with the exercise of an SAR or a payment with
respect to a Performance Award. The computation of the ordinary income to be
recognized and the timing of the income recognition with respect to the receipt
of stock with a substantial risk of forfeiture is discussed below in connection
with Restricted Stock. A Plan participant will not recognize a loss on the
termination of an unexercised SAR received under the Plan.
Restricted Stock. Generally, and except as noted below, the grant of
----------------
Restricted Stock is not taxable at the time of the grant. Instead, at the time
Restricted Stock vests or becomes transferable, an employee will recognize
ordinary income equal to (i) the excess of the fair market value of such
Restricted Stock on the date the shares vest or become transferable over (ii)
the price, if any, paid for such Restricted Stock. For this purpose, Restricted
Stock will be deemed to be transferable only if the transferee's rights in the
Restricted Stock are not subject to a substantial risk of forfeiture. An
employee may, however, elect to recognize income as of the date of grant of the
Restricted Stock, in an amount equal to (i) the excess of the fair market value
of the Restricted Stock on the date of grant over (ii) the price, if any, paid
for the Restricted Stock. If such an election is made, no additional income will
be recognized at the time the stock vests or becomes
-18-
<PAGE>
transferable. In the event of a subsequent forfeiture of the shares, an employee
making such an election may be able to recognize a capital loss with respect to
the amount, if any, paid for such Restricted Stock, but only to the extent such
amount exceeds the amount realized by such employee on such forfeiture. The
employee will not be able to recognize a loss for tax purposes with respect to
the excess of fair market value over the purchase price which was previously
included in income. The use of Restricted Stock as all or a portion of the
exercise price of a non-qualified stock option will not result in gain or loss
to the optionee to the extent that such optionee receives through the exercise
of such option shares of stock having restrictions and conditions substantially
similar to those applicable to such Restricted Stock. Dividends paid on the
shares of Restricted Stock before they vest will be taxed to the employee either
as additional compensation or, if the employee has made the election described
above, as dividend income.
Basis and Holding Period of Shares. In most cases, the basis in shares
----------------------------------
acquired upon exercise of a non-qualified option or SAR, upon an award of
Restricted Stock or upon payment with respect to a Performance Award, will be
equal to the fair market value of the shares on the employee's income
recognition date, and the holding period for determining gains and losses on a
subsequent disposition of such shares will begin on such date. In the case of an
incentive stock option, the basis of the shares acquired on exercise of the
option will be equal to the option's exercise price, and the holding period of
the shares will begin on the date the incentive stock option is exercised.
However, if shares of previously acquired stock are surrendered to pay the
exercise price of an incentive stock option or a non-qualified stock option, the
basis and holding period of the shares received in exchange therefor are
determined differently. The basis of the shares surrendered to pay the exercise
price becomes the basis of an equal number of new shares received upon the
exercise of the option, and the holding period of the new shares will include
the holding period of the shares surrendered to pay the exercise price (except
for the purpose of meeting the holding period required by Section 422 of the
Code). The remaining shares received upon the exercise of an incentive option
will have a basis equal to any cash paid on the exercise and any gain recognized
on the disposition of statutory option stock under Section 424(c)(3) of the
Code. The remaining shares received upon the exercise of a non-qualified option
will have a basis equal to the fair market value of such shares less any cash
paid on the exercise (the amount included in the participant's taxable income).
The holding period for such remaining shares will begin on the date such shares
are received by the participant.
As a general rule, the Company will be entitled to a deduction for federal
income tax purposes at the same time and in the same amount that an employee
recognizes ordinary income from awards under the Plan (including the recognition
of ordinary income as the result of a holder of stock obtained through exercise
of an ISO disposing of such stock prior to the expiration of the required
holding period), to the extent such income is considered reasonable compensation
under the Code and generally provided that the Company complies with the
applicable reporting requirements with respect to the ordinary income recognized
by the employee. The Company will not, however, be entitled to a deduction with
respect to payments to employees which are contingent upon a Change of Control
if such payments are deemed to constitute "excess parachute payments" pursuant
to Section 280G of the Code and do not qualify as reasonable compensation
pursuant to that Section. In addition, such payment will subject the recipient
to a 20% excise tax. The Company also may not be entitled to a deduction with
respect to payments to certain employees of the Company to the extent that the
total remuneration of such employees is found to be excessive under Section
162(m) of the Code.
General. 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. Plan participants may also be subject to state and
-19-
<PAGE>
local taxes in connection with the grant or exercise of options, SARs
performance awards or Restricted Stock granted under the Plan and the sale or
other disposition of shares acquired upon exercise of the options or otherwise
received pursuant to the Plan. EACH EMPLOYEE RECEIVING A GRANT OF OPTIONS, SARS,
PERFORMANCE AWARDS OR RESTRICTED STOCK SHOULD CONSULT WITH HIS OR HER PERSONAL
TAX ADVISOR REGARDING FEDERAL, STATE AND LOCAL CONSEQUENCES OF PARTICIPATING IN
THE PLAN.
PROPOSAL THREE:
AMENDMENT TO DIRECTORS PLAN
On March 14, 1995, the Company's Board of Directors adopted, subject to the
approval of the Company's stockholders, the Just For Feet, Inc. Non-Employee
Director Stock Option Plan (the "Directors Plan"). The Company's stockholders
approved the Directors Plan on June 26, 1995 and the Board of Directors
subsequently amended the plan to effect certain technical amendments.
The Directors Plan initially provided for the granting of options to non-
employee directors of the Company to purchase up to an aggregate of 125,000
shares of the Company's common stock. As a result of stock splits effected in
1995 and 1996, the Directors Plan currently reserves an aggregate of 281,250
shares for issuance pursuant to the exercise of options granted to non-employee
directors under the Directors Plan. There are presently six persons (seven
persons if Mr. John Berg is elected as a director at the 1999 Annual Meeting)
eligible to participate in the Directors Plan. The Board of Directors believes
that directors who participate in stock option plans have a closer
identification with the Company by virtue of their ability as stockholders to
participate in the Company's growth and earnings. The purpose of the Directors
Plan is to promote the long-term success of the Company by providing financial
incentives to non-employee directors who are in positions to make significant
contributions toward such success. The Directors Plan is designed to attract
and retain individuals of outstanding ability to serve as directors of the
Company and to encourage such directors to acquire a proprietary interest in the
Company, to continue service as directors of the Company and to render superior
performance during such service.
The Proposed Amendment
The Board of Directors believes it is in the best interest of the Company
and its stockholders to increase the number of shares available for issuance
pursuant to awards made under the Directors Plan. On March 18, 1999, the Board
of Directors approved, subject to stockholder approval at the 1999 Annual
Meeting, an amendment to the Directors Plan to increase the number of shares
available for issuance thereunder by 118,750 shares, from 281,250 shares to
400,000 shares. The Company's rapid growth since the adoption of the Directors
Plan has resulted in the addition of non-employee directors to the Company's
Board of Directors, resulting in the grant of awards covering nearly all of the
shares of common stock available under the Directors Plan. As of April 12,
1999, there remained only 7,500 shares available for issuance under the Plan.
The proposed increase in the number of authorized shares would ensure the
uninterrupted continuation of the Directors Plan as the Company continues its
expansion.
A copy of the proposed amendment to the Directors Plan is attached to this
Proxy Statement as Exhibit "B" and is incorporated herein by reference. The
Board of Directors of the Company recommends that stockholders vote FOR the
foregoing amendment. The amendment must be approved by a majority of the shares
present in person or by proxy at the meeting and entitled to vote on the matter.
Description of the Plan
Administration and Option Grants. The Directors Plan is administered by
--------------------------------
the Stock Option Committee and the Board of Directors of the Company.
-20-
<PAGE>
Without the necessity of action by the Stock Option Committee or the Board
of Directors, the plan provides for automatic stock option grants annually on
the first day of the Company's fiscal year during the term of the plan to each
non-employee director of the Company to purchase 2,500 shares of common stock at
an exercise price equivalent to the fair market value of the shares on such
date. In addition, the Directors Plan provides for a one-time grant of options
to purchase 25,000 shares to all non-employee directors upon becoming a director
(with the exception of Messrs. Bart Starr and Warren C. Smith, Jr.) and to any
person who becomes a non-employee director in the future.
Participants. The persons eligible to receive options under the Directors
------------
Plan are persons who serve in the capacity of non-employee directors of the
Company.
Exercise Price. The exercise price of options granted under the Directors
--------------
Plan is the average between the closing "bid" and "ask" prices of the common
stock as reported by Nasdaq on the date the option is granted. The exercise
price may be paid in cash or shares of common stock of the Company, or a
combination of cash and shares of Common Stock of the Company.
Duration of Options. The shares subject to the option may be purchased in
-------------------
whole or in part by the optionee from time to time after stockholder approval of
the Directors Plan, but in no event later than 10 years from the date the option
is granted.
Adjustment of Shares. In the event that dividends are payable in common
--------------------
stock of the Company or in the event there are splits, subdivisions or
combinations of shares of common stock of the Company, the Directors Plan
provides that a proportionate adjustment will be made in the number of shares
available for option under the Directors Plan, and, as to options then
outstanding, a proportionate adjustment will be made to the number of shares
subject to the option and to the purchase price per share. In the event the
Company is merged or consolidated with another corporation and the Company is
not the surviving corporation, or in the event the property or stock of the
Company is acquired by another corporation, or in the event of a reorganization,
recapitalization or liquidation of the Company, the Board of Directors of the
Company, or the Board of Directors of any corporation assuming the obligations
of the Company shall make appropriate provisions for the protection of any
outstanding options by the substitution on an equitable basis of appropriate
stock of the Company, or the merged, consolidated or otherwise reorganized
corporation which will be issuable in respect to the shares of common stock of
the Company, provided only that the excess of the aggregate fair market value of
the shares subject to option immediately after such substitution over the
purchase price thereof is not more than the excess of the aggregate fair market
value of the shares subject to option immediately before such substitution over
the purchase price thereof.
Nontransferability. Options granted under the Directors Plan may only be
------------------
transferred by will or by the laws of descent and distribution. During the
optionee's lifetime, such options are exercisable only by the optionee.
Term of the Directors Plan. Options may be granted pursuant to the
--------------------------
Directors Plan from time to time, but no later than 10 years from the date the
plan was adopted by the Board of Directors.
Amendment or Termination of the Directors Plan. The Directors Plan may at
----------------------------------------------
any time be terminated, modified or amended by a majority vote of the
stockholders of the Company. The Board of Directors of the Company may, from
time to time, modify or amend the Directors Plan in such respects as it deems
advisable, provided that, without approval of the stockholders, the Board of
Directors may not increase the maximum number of shares for which options may be
granted under the Directors Plan, either in the aggregate or to any eligible
participant, change the class of persons eligible for options under the
Directors Plan, or otherwise materially modify the requirements as to
eligibility for participation in the Directors Plan, or otherwise materially
increase the benefits accruing to participants under the Directors Plan.
-21-
<PAGE>
Outstanding Options Under the Directors Plan
As of April 12, 1999, the Company had outstanding options under the Plan,
to purchase an aggregate of 273,750 shares of Common Stock. On April 12, 1999,
the market value of the Company's Common Stock was $11.13 per share and the
aggregate market value of the Common Stock underlying such options was
$3,046,838. The following table indicates the amount of options held by the (i)
Named Executive Officers; (ii) all current executive officers as a group; (iii)
all current directors who are not executive officers as a group; (iv) each
nominee for election as director; and (v) all employees, including all current
officers who are not executive officers, as a group:
<TABLE>
<CAPTION>
Number of Shares
Name Position Underlying Option
---- -------- -----------------
<S> <C> <C>
Harold Ruttenberg Chairman, President and Chief Executive Officer 0
Eric L. Tyra Executive Vice President and Chief Financial Officer 0
Adam J. Gilburne Executive Vice President; President Superstore Division 0
Alex M. Bond Former Executive Vice President - Strategic 0
Development
Don-Allen Ruttenberg Executive Vice President 0
Scott C. Wynne Executive Vice President - Operations and Secretary 0
Bart Starr Sr. Director 11,250
Michael P. Lazarus Director 67,500
Randall L. Haines Director 67,500
David F. Bellet Director 45,000
Edward S. Croft, III Director 82,500
Warren C. Smith, Jr. Director 0
Helen Rockey Director Nominee 0
John A. Berg Director Nominee 0/(1)/
All current directors who
are not executive officers
as a group.................................................................................... 273,750
All executive officers as
a group....................................................................................... 0
All employees,
including all current
officers who are not
executive officers, as a
group......................................................................................... 0
</TABLE>
- ------------
(1) Will become entitled to an automatic grant of options to purchase 25,000
shares of Common Stock upon election to the Board of Directors at the 1999
Annual Meeting and stockholder approval of the amendment to the Directors'
Plan.
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<PAGE>
Federal Income Tax Consequences
All options to be granted under the Directors Plan are non-statutory options
which are not entitled to special treatment under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). For a discussion of the tax
treatment of non-statutory stock options, see "Proposal Two: Amendment to 1997
Employee Incentive Plan -- Federal Income Tax Consequences -- Non-Qualified
Stock Options," "-- Basis and Holding Period of Shares," and "-- General."
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP served as the independent auditors of the Company for
the fiscal year ended January 30, 1999 and has been appointed by the Board of
Directors to continue in that capacity in fiscal 1999. 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 stockholders.
ANNUAL REPORT TO STOCKHOLDERS AND REPORT ON FORM 10-K
Additional information concerning the Company, including financial
statements of the Company, is provided in the Company's 1998 Annual Report to
Stockholders that accompanies this proxy statement. The Company's Annual Report
on Form 10-K for the year ended January 30, 1999, as filed with the Securities
and Exchange Commission, is available to stockholders who make a written request
therefor to Mr. Scott C. Wynne, at the offices of the Company, 4700 Cahaba
Valley Road, Birmingham, Alabama 35242. Copies of exhibits filed with that
report or referenced therein will be furnished to stockholders of record upon
request and payment of the Company's expenses in furnishing such documents.
STOCKHOLDER PROPOSALS
Any proposal of stockholders intended to be presented at next year's Annual
Meeting must be received at the principal executive offices of the Company not
later than December 30, 1999 directed to the attention of the Corporate
Secretary, in order to be eligible for inclusion in the Company's proxy
statement and form of proxy relating to that meeting. In addition, the
Company's bylaws allow stockholders to bring business before the annual meeting
if such stockholder has provided written notice to the Company of his intent to
bring such business before the meeting not less than 60 days nor more than 90
days prior to the first anniversary of preceding year's annual meeting (subject
to adjustment if the subsequent year's annual meeting is substantially moved).
Proxies solicited by the Company for the 2000 Annual Meeting may confer
discretionary authority to vote on any proposals received after March 15, 2000.
Any stockholder proposals must comply in all respects with the rules and
regulations of the Securities and Exchange Commission and the Company's bylaws.
A copy of the Company's bylaws may be obtained by writing to the Corporate
Secretary.
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<PAGE>
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
April 29, 1999
-24-
<PAGE>
EXHIBIT A
AMENDMENT NO. 2
TO
AMENDED AND RESTATED EMPLOYEE INCENTIVE STOCK OPTION PLAN
JUST FOR FEET, INC.
WHEREAS, the Board of Directors of Just For Feet, Inc. (the "Corporation")
has previously adopted, and the stockholders of the Corporation have approved,
the1997 Employee Incentive Plan, as amended (the "Plan") pursuant to which
various types of incentive awards may be issued to eligible directors, officers,
employees, consultants and advisors 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 awards 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 3 of the Plan shall be amended by deleting the first sentence
of such section in its entirety and substituting therefor the following:
"The total number of shares of stock reserved and available for
distribution under the Plan shall be 4,000,000."
ARTICLE II
EFFECTIVE DATE OF AMENDMENT
2.1 The amendment effected hereby shall be effective for awards granted
under the Plan to eligible participants 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 stockholders. In the
event stockholder 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 participants shall be void.
A-1
<PAGE>
EXHIBIT B
AMENDMENT NO. 2
TO
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
WHEREAS, the Board of Directors of Just For Feet, Inc. (the "Corporation")
has previously adopted, and the stockholders of the Corporation have approved,
the Non-Employee Director Stock Option Plan (the "Plan") pursuant to which non-
qualified stock options may be granted to non-employee directors 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 options granted under the Plan;
NOW, THEREFORE, the Plan is amended upon the terms, and subject to the
conditions, set forth herein:
ARTICLE III
AMENDMENT TO PLAN
1.1 Section 1.3(a) of the Plan shall be amended by deleting such section in
its entirety and substituting therefor the following:
"(a). The aggregate number of shares of Common Stock with respect to
which Options may be granted shall not exceed 400,000 shares of Common
Stock, subject to possible adjustment in accordance with Section 3.1."
ARTICLE IV
EFFECTIVE DATE OF AMENDMENT
2.1 The amendment effected hereby shall be effective for options under the
Plan to eligible directors 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 stockholders. In the event
stockholder 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 shall be void.
B-1
<PAGE>
JUST FOR FEET, INC.
7400 Cahaba Valley Road
Birmingham, Alabama 35242
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE 1999
ANNUAL MEETING OF STOCKHOLDERS.
The undersigned hereby appoints Harold Ruttenberg and Scott C. Wynne, 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
Stockholders of JUST FOR FEET, INC. to be held on Tuesday, June 1, 1999 at 10:00
a.m. at The Harbert Center, 2019 Fourth Avenue North, Birmingham, Alabama, and
any postponement, rescheduling or adjournment thereof:
1. To elect nine (9) directors to serve until the next annual meeting of
stockholders and until their successors are elected and have qualified.
<TABLE>
<S> <C>
[ ] FOR all nominees listed below (except [ ] WITHHOLD AUTHORITY to vote for all
as marked to the contrary below) nominees listed below.
</TABLE>
HAROLD RUTTENBERG, BART STARR, SR., MICHAEL P. LAZARUS, RANDALL L. HAINES,
DAVID F. BELLET, EDWARD S. CROFT, III, WARREN C. SMITH, JR., HELEN ROCKEY,
JOHN A. BERG
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 1997 Employee Incentive Plan to
increase the number of shares available for issuance pursuant to such plan
from 2,900,000 shares to 4,000,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To approve an amendment to the Company's Non-Employee Director Stock Option
Plan to increase the number of shares available for issuance pursuant to
such plan from 281,250 shares to 400,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To vote in accordance with their best judgment with respect to any other
matters that may properly come before the meeting.
(continued and to be signed on reverse)
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.
--------------------------------------------
--------------------------------------------
Print Name(s):______________________________
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:______________________________________
