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 Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
JOS. A. BANK CLOTHIERS, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
JOS. A. BANK CLOTHIERS, INC.
500 Hanover Pike
Hampstead, Maryland 21074
May 1, 1997
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of the Shareholders
of Jos. A. Bank Clothiers, Inc. which will be held at the Sheraton Inner Harbor
Hotel, Baltimore, Maryland, commencing at 10:00 a.m. on Tuesday, June 10, 1997.
The following pages contain the formal notice of the Annual Meeting and the
related Proxy Statement. The Company's Annual Report for the fiscal year ended
February 1, 1997 is enclosed with this proxy material. The Annual Report is not
to be regarded as proxy solicitation material.
Issues to be considered and voted upon at the Annual Meeting are set forth
in your Proxy Statement. You are encouraged to review carefully this statement
and attend the Annual Meeting in person. If you cannot attend the Annual Meeting
in person, please be sure to sign and date the enclosed proxy card and return it
at your earliest convenience so that your shares will be represented at the
Annual Meeting.
I look forward to meeting you on June 10th and discussing with you the
business of your Company.
Sincerely,
/s/ Timothy F. Finley
------------------------------------
Timothy F. Finley
Chairman and Chief Executive Officer
<PAGE>
JOS. A. BANK CLOTHIERS, INC.
500 Hanover Pike
Hampstead, Maryland 21074
Notice of Annual Meeting of Shareholders to be Held
June 10, 1997
To the Shareholders of Jos. A. Bank Clothiers, Inc.
Notice is hereby given that the Annual Meeting of Shareholders of Jos. A.
Bank Clothiers, Inc. (the "Company") will be held at the Sheraton Inner Harbor
Hotel, Baltimore, Maryland, at 10:00 a.m. on Tuesday, June 10, 1997 for the
following purposes:
1. To elect two directors for terms expiring in 2000 or at such time
as their respective successors have been duly elected and
qualified;
2. To ratify the appointment of Arthur Andersen LLP as independent
public accountants of the Company for the fiscal year ending
January 31, 1998; and
3. To transact any other business that may properly come before the
Annual Meeting of Shareholders or any adjournment thereof.
The Board of Directors has fixed the close of business on April 25, 1997 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting of Shareholders and at any adjourned session
thereof.
To ensure your representation at the Annual Meeting you are urged to sign
and date the enclosed proxy and return it as promptly as possible in the self
addressed envelope provided for your convenience. Please do this whether or not
you plan to attend the Annual Meeting of Shareholders. Should you attend, you
may, if you wish, withdraw your proxy and vote your shares in person.
By order of the Board of Directors.
/s/ Charles D. Frazer
---------------------
Charles D. Frazer,
Secretary
May 1, 1997
<PAGE>
JOS. A. BANK CLOTHIERS, INC.
500 Hanover Pike
Hampstead, Maryland 21074
ANNUAL MEETING OF SHAREHOLDERS
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
The enclosed form of proxy is solicited on behalf of the Board of Directors
(the "Board") of Jos. A. Bank Clothiers, Inc. (the "Company") to be voted at the
Annual Meeting of Shareholders to be held on June 10, 1997 at 10:00 a.m. at the
Sheraton Inner Harbor Hotel, Baltimore, Maryland and at any adjourned session
thereof (the "Meeting"). This Proxy Statement and accompanying form of proxy
will be mailed commencing on or about May 1, 1997 to all shareholders entitled
to vote at the Meeting. The Company's Annual Report for the fiscal year ended
February 1, 1997 ("Fiscal 1996") is enclosed with this proxy material. The
Company's Annual Report is not to be regarded as proxy solicitation material.
You can ensure that your shares will be voted by signing and returning the
enclosed proxy in the envelope provided. Unless otherwise specified in the proxy
(and except for broker non-votes as described below), stock represented by
proxies will be voted (i) FOR the election of management's nominees for
director, (ii) FOR the ratification of the appointment of Arthur Andersen LLP as
independent public accountants of the Company for the fiscal year ending January
31, 1998 ("Fiscal 1997") and (iii) at the discretion of the proxyholders with
respect to such other matters as may come before the Meeting. Sending in a proxy
will not affect your right to attend the Meeting and vote in person. Any
Shareholder giving a proxy will have the right to revoke it at any time prior to
its exercise by giving written notice of revocation to the Company, Attention:
Secretary, by filing a new written appointment of a proxy with an officer of the
Company or by voting in person at the Meeting. Attendance at the Meeting will
not automatically revoke the proxy.
The cost of solicitation of proxies, which is estimated to be less than
$2,500, will be borne by the Company. Directors, officers and employees of the
Company may solicit proxies by telephone, telegraph or personal interview, but
will not be specially compensated for such service. The Company will reimburse
banks, brokerage firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred by them in sending proxy materials to beneficial
owners of shares.
Shareholders of record as of the close of business on April 25, 1997 (the
"Record Date") are the only persons entitled to vote at the Meeting. As of the
Record Date, the Company had outstanding 6,791,152 shares of Common Stock, $.01
par value (the "Common Stock"), the Company's only class of voting securities
outstanding. Each share of Common Stock outstanding entitles the holder thereof
to one vote. The presence, in person or by proxy, of the holders of a majority
of all the outstanding shares of Common Stock constitutes a quorum at the
Meeting. Abstentions and broker non-votes (i.e. shares of Common Stock
represented at the Meeting by proxies held by brokers or nominees as to which
(i) instructions have not been received from the beneficial owners or person
entitled to vote and (ii) the broker or nominee does not have discretionary
voting power on a particular matter) with respect to any proposal are counted as
shares represented and voted at the Meeting only for the purpose of determining
the number of shares required to approve a
1
<PAGE>
proposal. However, shares of Common Stock represented by proxies that withhold
authority to vote for a nominee for election as a director (including broker
non-votes) will not be counted as a vote represented and voted at the Annual
Meeting for purposes of determining the number of votes required to elect such
nominee.
The Company's principal executive offices are located at 500 Hanover Pike,
Hampstead, Maryland 21074.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
On April 1, 1997, the Oversight Committee (now known as the Executive
Committee) of the Board determined to reduce the size of the Board from ten to
seven members. As a consequence thereof, Paul L. Schneider, Henry C. Schwartz
and Donald V. Smith resigned from the Board. The Company thanks Messrs.
Schneider, Schwartz and Smith for their years of outstanding and dedicated
service to the Company.
The Board consists of seven (7) members and is divided into three classes.
Each class holds office for a term of three years. The Board has nominated
Timothy F. Finley and Andrew A. Giordano for election at the Meeting to the
Board for terms of three years expiring in 2000 or at such time as their
respective successors have been duly elected and qualified. In voting for a
director, for each share of Common Stock held as of the Record Date, the
shareholder is entitled to cast one vote either in favor of or against each
candidate, or to abstain from voting for either or both of the candidates. The
Board recommends a vote FOR Mr. Finley and Mr. Giordano as directors. It is
intended that shares represented by the enclosed form of proxy will be voted in
favor of the election of Mr. Finley and Mr. Giordano as directors. Mr. Finley
and Mr. Giordano are currently directors of the Company(1). If the nominees
should become unavailable for election, the shares represented by such proxies
will be voted for such substitute nominees as may be nominated by the Board.
The Board has no reason to expect that either Mr. Finley or Mr. Giordano will
not be a candidate for director at the Meeting. The election of directors
requires the affirmative vote of a plurality of the shares of Common Stock
present or represented and entitled to vote at the Meeting.
- -----------------
(1) Mr. Finley's term as a director expires in 1998. However, Mr. Finley has
consented to stand for early re-election in order that the Company may comply
with the requirement in its Restated Certificate of Incorporation that the
three classes of directors be of equal or nearly equal number.
Directors
The table set forth below contains the following information as to the
nominees for director as well as those directors continuing in office: name,
age, the positions and offices held and the year of the commencement of the
nominees' and continuing directors' service as directors of the Company.
<TABLE>
<CAPTION>
Director
Name Age Position or Office with the Company Since
- ---- --- ----------------------------------- -----
<S><C>
Nominees for Director for terms expiring in 2000
Timothy F. Finley 53 Chairman of the Board,
Chief Executive Officer and Director 1990
Andrew A. Giordano 64 Director 1994
</TABLE>
2
<PAGE>
<TABLE>
<S><C>
Continuing Directors with terms expiring in 1999
David A. Preiser 39 Director 1990
Robert N. Wildrick 53 Director 1994
Continuing Directors with terms expiring in 1998
Robert B. Bank 50 Director 1994
Peter V. Handal 54 Director 1993
Gary S. Gladstein 52 Director 1989
</TABLE>
Nominees for Director for terms expiring in 2000
Timothy F. Finley has served as a director, Chairman of the Board and Chief
Executive Officer of the Company since August 1990. He was President of the
Company from March 1995 to September 1996. In addition, Mr. Finley serves as
Chairman of the Board of The Finley Group, Inc., a business crisis management
group, and has held that position since 1985. Mr. Finley is also a director of
Cole National Corporation, a retailing company; Venture Stores, Inc., a family
value retailer; and Pic 'N Pay, a discount retailer.
Andrew A. Giordano has served as a director of the Company since January
1994. Mr. Giordano has been a principal of The Giordano Group, Limited, a
diversified consulting firm, since its founding in February 1993. From May 1987
to February 1993, Mr. Giordano was Executive Vice President of Lamonts Apparel,
Inc. Mr. Giordano also currently serves as a director of Cherry & Webb Inc., a
ladies specialty apparel company; Graham-Field Health Products, Inc., a home
health care products company; and the Nomos Corporation, a conformal radiation
therapy provider. In 1984, Mr. Giordano retired from his position as CEO, Naval
Supply Systems Command with the rank of Rear Admiral.
Continuing Directors with terms expiring in 1999
David A. Preiser has served as a director of the Company since 1990. Mr.
Preiser has been a Managing Director of Houlihan, Lokey, Howard & Zukin,
Inc., an investment banking firm, since 1993. Mr. Preiser was a Senior
Vice President of Houlihan, Lokey, Howard & Zukin, Inc. from 1992 to 1993 and
a Vice President of Houlihan, Lokey, Howard & Zukin, Inc. from 1991 to 1992.
Mr. Preiser is a director of NVR, Inc., a home building company.
Robert N. Wildrick has served as a director of the Company since 1994. Mr.
Wildrick holds the positions (since April 1995) of Director, President and Chief
Executive Officer and (since January 1996) Chairman of the Board of Venture
Stores, Inc., a family value retailer. Prior to April 1995, Mr. Wildrick was
employed by Belk Stores Services, a retailing company, in various capacities,
including Corporate Executive Vice President for Merchandise and Sales
Promotion, Chief Merchandising Officer, Senior Vice President (Corporate) and
General Manager. Mr. Wildrick is a member of the board of directors and the
executive committee of The Fashion Association.
Continuing Directors with terms expiring in 1998
Robert B. Bank has served as a director of the Company since December 1994.
Mr. Bank has been the President of Robert B. Bank Advisory Services, an
independent consulting and investment firm specializing in strategic planning,
finance and mergers and acquisitions for consumer products companies, since
1982. Mr. Bank also currently serves as a director of Nautica Enterprises, an
apparel company, as well as a director in several privately held companies.
3
<PAGE>
Peter V. Handal has served as a director of the Company since September
1993. Mr. Handal has been the President of COWI International Group, a
consulting firm specializing in consumer products, international trade, retail
and real estate, since 1989. Since 1984, Mr. Handal has been Managing Partner of
J4P Associates, a real estate concern. Mr. Handal also currently serves as a
director of Cole National Corp., a retailing company; Graham-Field Health
Products, Inc., a manufacturer and distributor of health care products; and
Family Bargain Corp., a retailing company.
Gary S. Gladstein has served as a director of the Company since 1989. Mr.
Gladstein has been a Managing Director of Soros Fund Management LLC, an
investment advisory firm, since 1989. Mr. Gladstein is also a Certified
Public Accountant. Mr. Gladstein currently serves as a director of
Crystal Oil Company, I.R.S.A. Inversiones Y Representaciones S.A., a
publicly held real estate company in Buenos Aires, Argentina, Cresud, S.A., a
publicly held agriculture company in Argentina, The Argentine High Yield and
Capital Appreciation Fund and certain other non-public companies.
Certain of the Company's directors were elected pursuant to a stockholder's
agreement which has since been terminated and restated. Pursuant to such
agreement, Mr. Gladstein was elected as the designee of the Company's then
minority shareholder, Quantum Fund, N.V., while Messrs. Finley, Schwartz,
Handal, Preiser, Schneider and Smith were elected as the designees of JAB
Holdings, Inc. ("Holdings"). As of January 29, 1994, the Company's shareholders
entered into an Amended and Restated Stockholders Agreement (the "Stockholders
Agreement") at which time Mr. Giordano was elected as the designee of Altus
Finance Co., and Mr. Wildrick was elected as the designee of the majority of the
directors then in office. The provisions of the Stockholders Agreement relating
to the election of the directors terminated effective upon the closing of the
Company's initial public offering of the Common Stock in May 1994.
Board and Committee Meetings
The Board has an Audit Committee, a Compensation Committee and an Executive
Committee. The functions of the Audit Committee include recommending to the
Board the retention of independent public accountants, reviewing the scope of
the annual audit undertaken by the Company's independent public accountants and
the progress and results of their work, and reviewing the financial statements
of the Company and its internal accounting and auditing procedures. The Audit
Committee is comprised of Messrs. Wildrick, Gladstein and Preiser. The Audit
Committee met five times during Fiscal 1996 (including two telephonic
meetings)(1). During the three regular meetings, the Audit Committee had a
chance to discuss matters with the Company's independent public accountants
outside the presence of management. The function of the Compensation
Committee is to supervise the Company's compensation policies, administer the
employee incentive plans, review officers' salaries and bonuses, approve
significant changes in employee benefits and consider other matters referred
to it by the Board. The Compensation Committee is comprised of Messrs. Bank,
Giordano and Handal. The Compensation Committee met five times in Fiscal
1996(2). The Executive Committee is comprised of Messrs. Finley, Preiser,
Giordano, Bank and Handal and has the same powers as the Board and may act when
the Board is not in session, subject to limitations of the Delaware General
Corporation Law. During Fiscal 1996, the Executive Committee (then known as
the Oversight Committee) met four times (including one telephonic
meeting). During Fiscal 1996, the Board met four times. Each of the directors
attended at least 75% of the total number of Board and applicable Committee
meetings; except that Mr. Gladstein was unable to attend two meetings of the
Board and one meeting of the Audit Committee.
- -------------------
(1) During Fiscal 1996, the Audit Committee was comprised of Messrs. Wildrick,
Gladstein and Schneider.
(2) During Fiscal 1996, the Compensation Committee was comprised of Messrs.
Giordano, Handal and Smith
4
<PAGE>
Compensation of Directors
Each director who is not also an employee of the Company (a "Non-Employee
Director") receives an annual fee of $5,000, in addition to $2,500 for each
Board meeting he attends and $1,000 for each Committee meeting he attends. One
half of the usual attendance fee (i.e. $1,250 and $500, respectively) is paid to
each director for participation in each telephonic Board or Committee meeting.
All directors are reimbursed for actual out-of-pocket expenses incurred by them
in connection with their attending meetings of the Board or of committees of the
Board.
In addition to the monetary compensation described above, under the
Company's 1994 Incentive Plan (the "1994 Incentive Plan")(1), each
Non-Employee Director is entitled to receive upon his/her appointment as a
director, pursuant to a formula, options to purchase up to 20,000 shares of
Common Stock at the fair market price of the Common Stock on the date of grant,
which options become exercisable as to one-fifth of such shares on each
January 1 following the grant. In the event that a Non-Employee Director fails
to attend at least 75% of the Board meetings in any calendar year, such person
automatically forfeits the right to exercise that portion of the option that
would otherwise have become exercisable on the next following January 1,
which portion shall cease to have any force or effect. The 1994 Incentive Plan
also provides for the grant of an immediately exercisable option to purchase up
to 1,000 shares of Common Stock on the date of the original grant and on each
anniversary thereof. As of the Record Date, each Non-Employee Director has
received options to purchase up to 23,000 shares of Common Stock pursuant to
1994 Incentive Plan; provided, however, that 4,000 of the options granted to
Mr. Gladstein have ceased to be of further force or effect. Options granted
pursuant to the formula expire and cease to be of any force or effect on the
earlier of the fifth anniversary of the date any such option was granted or
the first anniversary of the date on which an optionee ceases to be a member
of the Board.
- ----------------
(1) On or about January 24, 1997, the shares of Common Stock underlying the
options granted pursuant to the 1994 Incentive Plan were registered with the
Securities and Exchange Commission for public offering pursuant to a
registration statement on Form S-8.
Executive Officers
Other than Mr. Finley, who is listed above as a nominee for director, the
executive officers of the Company are:
Harvey G. Brown 60 Vice President, Tailoring, December 1995 to
present; Senior Vice President, Tailoring,
September 1995 to December 1995; Senior Vice
President, Real Estate and Special Projects,
August 1994 to September 1995; Senior Vice
President, Store Operations, September 1991 to
August 1994.
Gary W. Cejka 47 Vice President, Store Operations, September
1996 to present; Area Manager and Manager of
the Houston store, October 1992 to September
1996; President, Kleinhan's Clothiers, a six
store affiliate of Hartmarx Specialty Stores,
Inc., July 1989 to October 1992.
Martin E. Ferrara 38 Executive Vice President, Catalog and
Marketing, June 1995 to present. Since
September 1991, Mr. Ferrara has served
under various titles as an officer of the
Company with responsibility for catalog and
marketing.
5
<PAGE>
Charles D. Frazer 38 Vice President, General Counsel, March 1994
to present; Secretary, August 1994 to present;
Associate, John P. Healy, P.A., January 1990 to
March 1994.
John C. Harry 58 Senior Vice President, Manufacturing, September
1996 to present; consulted with After Six Ltd.,
a tuxedo manufacturer/wholesaler, July 1995 to
August 1996; Senior Vice President,
Operations, Plaid Clothing Group, a manufacturer
of men's tailored clothing headquartered in
Maryland, October 1992 to June 1995; Principal,
John C. Harry Associates, consultants to the
apparel industry, November 1986 to October 1992.
Thomas E. Polley 63 Vice President, Controller and Treasurer,
September 1995 to present; Vice President,
Controller, November 1993 to September 1995;
Chief Financial Officer, Curtis Mathes
Corporation, 1990 to April 1993.
Henry C. Schwartz 67 Vice Chairman, March 1995 to present;
President and Chief Merchandising Officer,
September 1990 to March 1995.
James W. Thorne 36 Vice President, Divisional Merchandise
Manager, Clothing, April 1996 to present.
Since May 1991, Mr. Thorne has served under
various titles as an officer of the Company
with responsibility for merchandising.
Frank Tworecke 50 President and Chief Merchandising Officer,
September 1996 to present; Executive Vice
President and Chief Merchandising Officer,
February 1996 to September 1996; President,
Merry-Go-Round Stores, an operating division of
Merry-Go-Round Enterprises, Inc. ("MGRE")(1),
1994 to 1996; Senior Vice President, Men's
and Children's Division, Lazarus Department
Store, 1990 to 1994.
David E. Ullman 39 Executive Vice President, Chief Financial
Officer, September, 1995 to present; Vice
President/Controller, Hanover Direct, Inc.,
August 1991 to August 1995; Manager, Arthur
Andersen & Co., December 1981 to August 1991.
- --------------------
(1) On January 11, 1994 (the "Petition Date"), MGRE and two of its
subsidiaries filed petitions for relief under Chapter 11 of the United
States Bankruptcy Code. Since the Petition Date, other affiliates of MGRE
filed Chapter 11 petitions. On or about August 2, 1994, after the Petition
Date, Mr. Tworecke joined MGRE as President of Merry-Go-Round Stores. On
March 1, 1996, after Mr. Tworecke left MGRE, the MGRE consolidated case was
converted to a Chapter 7 proceeding.
Executive Compensation
The following Summary Compensation Table sets forth information on
compensation earned by Mr. Finley and the four other most highly compensated
executive officers of the Company as of the end of Fiscal 1996, 1995 and 1994.
6
<PAGE>
I. Summary Compensation Table
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL ------------
COMPENSATION SECURITIES
------------ UNDERLYING ALL OTHER
FISCAL SALARY BONUS OPTIONS COMPENSATION
NAME & PRINCIPAL POSITION YEAR ($) ($) (#) ($)(1)
<S><C>
Timothy F. Finley .......................... 1996 $457,473 $343,857 75,000 $2,250
Chairman of the Board and 1995 445,558 -- -- 4,620
Chief Executive Officer 1994 469,415 -- 145,860 5,251
Frank Tworecke(2) .......................... 1996 180,608 175,000 100,000 73,187(3)
President and Chief 1995 -- -- -- --
Merchandising Officer 1994 -- -- -- --
Henry C. Schwartz .......................... 1996 232,780 -- -- 200
Vice Chairman 1995 345,784 -- -- 2,327
1994 379,820 -- 53,040 4,648
David E. Ullman(4) ......................... 1996 171,437 69,734 20,000 654
Executive Vice President, Chief 1995 60,189 -- 20,000 --
Financial Officer 1994 -- -- -- --
Martin E. Ferrara .......................... 1996 133,804 53,978 10,000 1,802
Executive Vice President, Catalog 1995 130,893 -- -- 2,327
and Marketing 1994 122,256 -- 22,000 2,128
</TABLE>
- --------------------
(1) Unless otherwise indicated, represents contributions by the Company under
its 401(k) profit sharing plan.
(2) Mr. Tworecke joined the Company in February, 1996.
(3) Represents reimbursed relocation expenses.
(4) Mr. Ullman joined the Company in September, 1995.
The Summary Compensation Table above excludes certain compensation in the
form of perquisites and other personal benefits where the aggregate amount of
such compensation does not exceed the lesser of either $50,000 or 10% of the
total of annual salary and bonus reported for each of the named executive
officers.
II. Aggregated Options/Exercises in Fiscal 1996 and Fiscal Year End Option
Values
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT FISCAL OPTIONS/SARS
SHARES ACQUIRED VALUE YEAR-END (#) AT FISCAL YEAR-END (1) ($)
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
<S><C>
Timothy F. Finley...... 0 0 142,628 / 191,688 $ 0 / $ 4,687.50
Frank Tworecke ........ 0 0 6,000 / 94,000 14,625 / 134,125.00
Henry C. Schwartz...... 0 0 106,567 / 42,432 0 / 0.00
David E. Ullman ....... 0 0 2,000 / 38,000 375 / 4,625.00
Martin E. Ferrara...... 0 0 4,400 / 27,600 0 / 625.00
</TABLE>
- --------------------
(1) Based on a closing price of the Common Stock of $4.0625 on January 31, 1997.
7
<PAGE>
III. Option Grants Table
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
- ----------------------------------------------------------------------------------------------------------------
Individual Grants | Potential Realization Value At
- ------------------------------------------------------------------------------| Assumed Annual Rates Of Stock
| | Percent Of | | | Price Appreciation For Option
| Number Of | Total | | | Term
| Securities | Options | | |
| Underlying | Granted to | Exercise Or | |---------------------------------
| Options | Employees In | Base Price |Expiration | |
Name | Granted (#) | Fiscal Year | ($/Sh) | Date | 5% ($) | 10% ($)
(a) | (b) | (c) | (d) | (e) | (f) | (g)
- ----------------------------------------------------------------------------------------------------------------
<S><C>
Timothy F. Finley | 75,000(1) | 29.1% | $4.00 | 9/10/06 | $189,000 | $477,750
|---------------|---------------|-------------|-----------|--------------------|------------
Frank Tworecke | 60,000(2) | 23.3% | 1.625 | 2/5/06 | 61,320 | 155,400
|---------------|---------------|-------------|-----------|--------------------|------------
| 40,000(1) | 15.5% | 4.00 | 9/10/06 | 100,800 | 254,800
|---------------|---------------|-------------|-----------|--------------------|------------
Henry C. Schwartz | 0 | -- | -- | -- | -- | --
|---------------|---------------|-------------|-----------|--------------------|------------
David E. Ullman | 20,000(1) | 7.8% | 4.00 | 9/10/06 | 50,400 | 127,400
|---------------|---------------|-------------|-----------|--------------------|------------
Martin E. Ferrara | 10,000(1) | 3.9% | 4.00 | 9/10/06 | 25,200 | 63,700
|---------------|---------------|-------------|-----------|--------------------|------------
</TABLE>
- --------------------
(1) Consists of options to purchase common stock granted as of September 10,
1996. Subject to the terms and conditions of the relevant option agreements,
25% of such options will vest on each September 10, 1998 thru 2001, after
which such options will be exercisable as to all shares.
(2) Consists of two grants of options to purchase common stock, 30,000 options
each, both dated as of February 5, 1996. Subject to the terms and conditions
of the relevant option agreement, of the first 30,000 option grant, 6,000 of
such options vest on each February 5, 1997 thru 2001, after which the first
30,000 options will be exercisable as to all shares. Subject to the terms and
conditions of the relevant option agreement, of the second 30,000 option grant,
10,000 of such options will vest on each June 12, 1998, 1999 and 2000, after
which the second 30,000 options will be exercisable as to all shares.
Executive Employment Agreements
Timothy F. Finley
Mr. Finley is employed by the Company pursuant to an employment agreement
expiring February 1, 1999, subject to automatic one year extensions. Under the
employment agreement, Mr. Finley currently (1997) receives an annual base salary
of $471,164. In addition, Mr. Finley is entitled to an annual performance-based
bonus of up to 75% of his base salary, subject to the satisfaction of certain
performance objectives set by the Compensation Committee of the Board. The
Company or Mr. Finley may terminate the employment agreement upon 60 days
written notice, provided that, in the case of termination by the Company
"without cause" or by Mr. Finley for "good reason," Mr. Finley shall be entitled
to receive his then current base salary through the then remaining term of his
employment (assuming no termination) or for one year, whichever is longer, and
the pro rata portion of his bonus. In the case of termination by Mr. Finley
following a change in control of the Company, Mr. Finley shall be entitled to
receive his base salary for the greater of (i) 18 months or (ii) the remaining
employment period (assuming no termination) not to exceed 24 months. The
agreement provides that Mr. Finley is subject to non-competition restrictions
during the six month period (one year in the case of a termination by Mr. Finley
other than for "good reason") following expiration or termination of employment
and for so long as any severance payments are being made.
In addition, as of January 29, 1994, the then current employment agreement
between the Company and Mr. Finley was amended to surrender his rights to
receive certain payments related to increases in the equity value of the Company
in exchange for, among other things, 210,144 shares of Common Stock. Of these
shares, 72,395 were withheld by the Company for the payment of related
8
<PAGE>
payroll and withholding taxes by the Company. Immediately following the issuance
of such shares, Mr. Finley sold back to the Company 41,061 shares for
$376,529. The Company then granted to Mr. Finley a non-qualified stock
option to repurchase the shares sold by him to the Company, plus the number of
shares that had been withheld, at an exercise price of $9.17 per share as
determined by the Board after consideration of the illiquid nature of the
shares.
Henry C. Schwartz
Mr. Schwartz is employed by the Company pursuant to an amended employment
agreement dated as of February 3, 1996. Pursuant to such agreement, Mr. Schwartz
will receive salary in the aggregate amount of $405,589 for services rendered to
the Company during the term commencing on February 4, 1996 and expiring on March
31, 1997. Approximately $161,000 of such salary is in the form of deferred
compensation which will be paid to Mr. Schwartz in equal installments between
April 1 and December 31, 1997. Mr. Schwartz is not entitled to consideration for
an annual bonus.
In addition, as of January 29, 1994, the then current employment agreement
between the Company and Mr. Schwartz was amended to surrender his rights to
receive certain payments related to increases in the equity value of the Company
in exchange for, among other things, 163,409 shares of Common Stock. Of these
shares, 56,294 were withheld by the Company for the payment of related payroll
and withholding taxes by the Company. Immediately following the issuance of such
shares, Mr. Schwartz sold back to the Company 39,665 shares for $363,728. The
Company then granted to Mr. Schwartz a non-qualified stock option to repurchase
the shares sold by him to the Company, plus the number of shares that had been
withheld, at an exercise price of $9.17 per share as determined by the Board
after consideration of the illiquid nature of the shares.
Frank Tworecke
Mr. Tworecke is employed by the Company pursuant to an employment agreement
expiring February 4, 1999, subject to automatic one year extensions. Under the
employment agreement, Mr. Tworecke currently (1997) receives an annual base
salary of $400,000. In addition, Mr. Tworecke will be entitled to an annual
performance-based bonus of up to 50% of his base salary, subject to the
satisfaction of certain performance objectives set by the Compensation Committee
of the Board. The Company or Mr. Tworecke may terminate the employment agreement
upon 60 days written notice, provided that, in the case of termination by the
Company "without cause" or by Mr. Tworecke for "good reason," Mr. Tworecke shall
be entitled to receive his then current base salary through the then remaining
term of his employment (assuming no termination) or for one year, whichever is
longer, and the pro rata portion of his bonus. In the case of termination by Mr.
Tworecke following a change in control of the Company, Mr. Tworecke shall be
entitled to receive his base salary for the greater of (i) 18 months or (ii) the
balance of the employment period (assuming no termination) not to exceed 24
months. The agreement provides that Mr. Tworecke is subject to non-competition
restrictions during the six month period (one year in the case of a termination
by Mr. Tworecke other than for "good reason") following expiration or
termination of employment and for so long as any severance payments are being
made. Among other compensation matters, the Company has loaned to Mr. Tworecke
$200,000 (the "Loan"), which will not require payment of principal or interest
during Mr. Tworecke's term of employment with the Company and will be forgiven
in full if, among other circumstances, Mr. Tworecke remains an employee of the
Company for ten years. The Loan will be partially forgiven if Mr. Tworecke
remains in the employ of the Company for more than five, but less than ten,
years. The Company also reimbursed Mr. Tworecke $73,187 for certain relocation
expenses and other costs incurred by him in connection with his commencement of
employment with the
9
<PAGE>
Company. In Fiscal 1996, pursuant to the employment agreement, Mr. Tworecke was
granted an option to purchase up to 60,000 shares of Common Stock at an exercise
price of $1.625 per share. These options will expire on February 25, 2006.
David E. Ullman
Mr. Ullman is employed by the Company pursuant to an employment agreement
expiring February 4, 1998. Under the employment agreement, Mr. Ullman currently
(1997) receives an annual base salary of $170,000. In addition, Mr. Ullman is
entitled to an annual performance-based bonus of up to 40% of his base salary,
subject to the satisfaction of certain performance objectives set by the
Compensation Committee of the Board. The Company may terminate the employment
agreement at any time. Mr. Ullman may terminate the employment agreement upon 60
days written notice. If the employment agreement is terminated by the Company
"without cause" or by Mr. Ullman for "good reason" (including a change in
control of the Company), Mr. Ullman shall be entitled to receive his then
current base salary through the then remaining term of his employment (assuming
no termination) or for one year, whichever is longer. The agreement provides
that Mr. Ullman is subject to non-competition restrictions for so long as any
severance payments are being made and, in the event of termination by the
Company "for cause" or by Mr. Ullman without "good reason", for the remaining
term of employment (assuming no termination).
Certain Transactions
Since 1990, The Finley Group, a business crisis management group of which
Mr. Finley is the Chairman of the Board and part owner, has performed various
services for the Company. Beginning in Fiscal 1993, The Finley Group was
primarily engaged by the Company to select new store locations and negotiate
leases. During Fiscal 1994, 1995 and 1996, The Finley Group was paid $72,200,
$68,600 and $31,300, respectively, for such services.
During Fiscal 1996, the Company loaned $200,000 to Mr. Tworecke in
accordance with the terms of his employment contract. See "Executive
Employment Agreements; Frank Tworecke."
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
beneficially own more than ten percent of a registered class of the Company's
equity securities to file reports of beneficial ownership of Common Stock (Forms
3, 4, and 5) with the Securities and Exchange Commission and NASDAQ. Officers,
directors, and greater-than-ten percent holders are required to furnish the
Company with copies of all such forms that they file.
To the Company's knowledge, based solely on the Company's review of the
copies of Forms 3 and 4, and amendments thereto, received by it during Fiscal
1996, and Forms 5 and amendments thereto, received by it with respect to Fiscal
1996, all filings applicable to its officers, directors, greater-than-ten
percent beneficial owners and other persons subject to Section 16 of the
Exchange Act were timely.
Compensation Committee Interlocks and Insider Participation
During Fiscal 1996, the Compensation Committee was comprised of Messrs.
Giordano, Handal
10
<PAGE>
and Smith. No such member of the Compensation Committee was at any time an
officer or employee of the Company or any of its subsidiaries. Mr. Finley, an
executive officer and director of the Company, is on the Compensation and
Development Committee of the Board of Directors of Venture Stores, Inc. Mr.
Wildrick, a director of the Company, is an executive officer and director of
Venture Stores, Inc.
Report of the Compensation Committee of the Board of Directors
The Company applies a consistent philosophy to compensation for all
employees, including senior management. This philosophy is based on the premise
that the achievements of the Company result from the coordinated efforts of all
individuals working toward common objectives. The Company strives to achieve
those objectives through teamwork that is focused on meeting the expectations of
customers and shareholders.
The Compensation Committee of the Board is composed solely of non-employee
directors. The Compensation Committee is responsible for administering the 1994
Incentive Plan and for making recommendations to the Company with respect to
executive officer compensation policies, including such matters as salaries,
incentive plans, benefits and overall compensation.
Compensation Philosophy
The goals of the compensation program are to align compensation with
business objectives and performance and to enable the Company to attract, retain
and reward senior management who contribute to the long-term success of the
Company. To attain these goals, the Company's executive compensation program is
composed of cash-based compensation (in the form of base salaries and bonuses)
and equity-based compensation (in the form of stock option grants). Having a
compensation program that allows the Company to successfully attract and retain
key employees permits the Company to enhance shareholder value, foster
innovation and teamwork and adequately reward employees.
The Company has established the following principles to guide development
of the Company's compensation program and to provide a framework for
compensation decisions:
o provide a total compensation package that will attract the
best talent to the Company, motivate individuals to perform
at their highest levels, reward outstanding performance and
retain executives whose skills are critical for building
long-term shareholder value; and
o establish for senior management annual incentives that are
directly tied to the overall financial performance of the
Company.
Compensation Vehicles
The Company has a simple total compensation program that consists of
cash-based compensation (in the form of base salaries and bonuses) and
equity-based compensation (in the form of stock option grants). Each component
is more fully described below.
Cash-Based Compensation
The Company determines compensation for employees by reviewing the
aggregate of base
11
<PAGE>
salary and annual bonus for comparable positions in the market. The
Company has an annual bonus plan which is approved by the Chief Executive
Officer and the Compensation Committee. For Fiscal 1996, all of the Company's
officers (other than Mr. Finley, Mr. Tworecke and Mr. Schwartz) and certain
key managers (as determined by the Compensation Committee upon
recommendation of the Chief Executive Officer) were included in the Fiscal 1996
Management Incentive Plan (the "Bonus Plan"). For participants other than Mr.
Finley and Mr. Tworecke, maximum potential awards under the Bonus Plan ranged
from 10% to 40% of the participants' base salaries. Mr. Finley's and Mr.
Tworecke's bonus criteria are included in their respective employment agreements
and are discussed in the section entitled "Executive Employment Agreements". The
Bonus Plan established (a) goals (the "EBIT Goals") for Company earnings
(without provision for bonuses) before interest and taxes (the "Company's
EBIT"), which were uniform for all Bonus Plan participants; and (b) goals for
departmental/individual performance (the "Performance Goals"), which varied with
each Bonus Plan participant. For Fiscal 1996, the first EBIT Goal was $1.5
million and the second EBIT Goal was $2.0 million. Except as otherwise
determined in the discretion of the Compensation Committee, no bonuses were
payable under the Bonus Plan unless the Company reached the first EBIT Goal
(regardless of whether a Bonus Plan participant satisfied his/her Performance
Goal). If the first EBIT Goal was reached, each participant was entitled to
receive a bonus equal to from 2.5% to 10% of base salary (depending upon such
participant's maximum potential award). If the second EBIT Goal was reached,
each participant was entitled to instead receive a bonus equal to from 5% to 20%
of base salary (depending upon such participant's maximum potential award). If
the Company's EBIT was between the first EBIT Goal and the second EBIT Goal, the
EBIT Goal-based award was prorated between the lower and upper ranges. Assuming
an EBIT Goal-based bonus was awarded, each participant who satisfied his/her
Performance Goal was entitled to receive twice the amount otherwise payable. The
Company's EBIT in Fiscal 1996 was approximately $3.3 million, an amount in
excess of the second EBIT Goal. Therefore, maximum available bonuses were paid
to all participants who satisfied their Performance Goals.
Equity-Based Compensation
The executive officers of the Company, as well as all employees of the
Company, are eligible (subject to the discretion of the Compensation Committee)
to participate in the 1994 Incentive Plan. The purpose of the 1994 Incentive
Plan is to provide additional incentive to employees to maximize shareholder
value by aligning more closely the employees' and shareholders' interests
through employee stock ownership. The 1994 Incentive Plan uses long term vesting
periods to encourage key employees to continue in the employ of the Company.
Subject to the terms and conditions of the 1994 Incentive Plan, the Compensation
Committee administers the 1994 Incentive Plan and has authority to determine the
individuals to whom stock options are awarded, the terms upon which option
grants are made and the number of shares subject to each option. Awards are
granted to reward individuals for outstanding contribution to the Company and as
incentives for officers and managers whose skills are critical for building
long-term shareholder value to continue in the employ of the Company.
In Fiscal 1996, the Compensation Committee approved an amendment to certain
options to purchase approximately 216,775 shares of Common Stock (the "Options")
previously granted by the Company under the 1994 Incentive Plan to the Company's
officers and certain key managers. Prior to the amendment, the vesting of the
Options was dependent upon the price of the Common Stock achieving certain
targets. Under the amendment, (a) one-third of the Options will vest on each of
June 12, 1998, 1999 and 2000, without regard to the price of the Common Stock on
the vesting dates and (b) the Options were converted from incentive stock
options to non-qualified stock options. As a result of the conversion, the
Company will receive a tax deduction at the time of the exercise of
12
<PAGE>
the Options. The Compensation Committee elected to amend the Options, upon
advice of an independent consultant, in order to reestablish the incentive
which the Options were intended to be. The Compensation Committee found that the
target prices for vesting of the Options were too high for the Options to
represent a meaningful incentive.
Chief Executive Officer Compensation
The base salary for Mr. Finley, Chairman and Chief Executive Officer
of the Company, for Fiscal 1996 was $457,473. Mr. Finley's salary was
determined pursuant to an Employment Agreement between the Company and
Mr. Finley. Mr. Finley received 75,000 options in Fiscal 1996. Upon a review
of Mr. Finley's Employment Agreement and the performance of the Company,
the Compensation Committee determined that a bonus in the amount of $343,857
was payable to Mr. Finley for Fiscal 1996. As approved by the
Compensation Committee early in 1996, the primary criterion upon which Mr.
Finley's bonus was based was the return of the Company to profitability as
measured by positive net income.
Compensation Committee:
Robert B. Bank
Andrew A. Giordano
Peter V. Handal
Security Ownership of Directors and Officers
The following table sets forth, as of the Record Date, certain information
regarding beneficial ownership of the Common Stock held by: (i) each person
known by the Company to own beneficially more than 5% of the outstanding Common
Stock; (ii) the individuals named in the Summary Compensation Table; (iii) each
of the Company's directors; and (iv) all of the Company's executive officers and
directors as a group.
13
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial Percentage of
Name of Beneficial Owner Ownership(1) Common Stock
- ------------------------ ----------------- -------------
<S><C>
AWM Investment Co., Inc. and Affiliates(2)....... 1,018,500 15.00
The Equitable Companies Incorporated(3).......... 676,790 9.97
Quantum Partners LDC(4).......................... 616,401 9.08
Executive Life Insurance Co. of New York in
Rehabilitation(5).............................. 410,914 6.05
Acacia National Life Insurance Company........... 105,047 1.55
Houlihan, Lokey, Howard & Zukin, Inc............. 4,488 *
Martin E. Ferrara(6)............................. 4,400 *
Timothy F. Finley(7)............................. 284,192 4.10
Henry C. Schwartz(8)............................. 212,023 3.07
Frank Tworecke(9)................................ 61,000 *
David E. Ullman(10).............................. 2,000 *
Robert B. Bank(11)............................... 21,000 *
Andrew A. Giordano(12)........................... 16,000 *
Gary S. Gladstein(13)............................ 42,239 *
Peter V. Handal(14).............................. 24,500 *
David A. Preiser(15)............................. 63,862 *
Paul L. Schneider(16)............................ 25,000 *
Donald V. Smith(17).............................. 71,862 1.06
Robert N. Wildrick(18)........................... 20,000 *
All executive officers and directors as a group
(19 persons)(19).............................. 863,478 12.01
</TABLE>
* Less than 1%.
- --------------------
(1) All information is as of the Record Date and was determined in accordance
with Rule 13d-3 under the Exchange Act based upon information furnished by the
persons listed or contained in filings made by them with the Securities and
Exchange Commission. Under Rule 13d-3, more than one person may be deemed to be
a beneficial owner of the same securities. Unless otherwise indicated by
footnote, the named individuals have sole voting and investment power with
respect to the shares of common stock beneficially owned. The amounts presented
include for each person or entity listed shares of Common Stock issuable upon
exercise of options that are exercisable within 60 days. Percentages are
computed on the basis of 6,791,152 shares of Common Stock outstanding as of the
Record Date plus the applicable option amounts for the person or entity.
(2) AWM Investment Company, Inc., a Delaware corporation ("AWM"), is the sole
general partner of MGP Advisers Limited Partnership, a Delaware limited
partnership ("MGP"), which is a registered investment advisor under the
Investment Advisors Act of 1940, as amended. MGP is a general partner of, and
investment advisor to, Special Situations Fund III, L.P., a Delaware limited
partnership (the "Fund"). AWM is a registered investment advisor under the
Investment Advisors Act of 1940, as amended, and also serves as the general
partner of, and investment advisor to, Special Situations Cayman Fund, L.P., a
limited partnership formed under the laws of the Cayman Islands (the "Cayman
Fund"). Austin W. Marxe is the principal limited partner of MGP and is the
principal owner, President and Chief Executive Officer of AWM. Mr. Marxe
is principally responsible for the selection, acquisition and disposition
of the portfolio securities by AWM on behalf of MGP, the Fund and the Cayman
Fund. The Fund owns 763,000 shares of Common Stock. The Cayman Fund owns
255,500 shares of Common Stock. The business address of AWM and its affiliates
is 153 East 53 Street, New York, NY 10022.
(3) The business address of The Equitable Companies Incorporated is 1290
Avenue of the Americas, New York, NY 10104. The shares represent 336,112
shares held by The Equitable Life Assurance Society of the United States
("Equitable Life"), a wholly-owned subsidiary of The Equitable Companies
Incorporated; 336,112 shares held by Equitable Deal Flow Fund, L.P., of whose
general partner Equitable Life is general partner; and 4,566 shares held by
Donaldson, Lufkin & Jenrette, Inc. ("DLJ"), a majority-owned subsidiary of The
Equitable Companies Incorporated, or DLJ's subsidiaries. DLJ was one of the
Underwriters of the Company's May 3, 1994 initial public offering.
(4) The business address of Quantum Partners LDC is c/o Curacao Corporation
Company N.V., Kaya Flamboyan 9, Willemstad, Curacao, Netherlands Antilles.
(5) The business address of Executive Life Insurance Co. of New York is c/o BEA
Associates, One Citicorp Center, 153 East 53rd Street, New York, NY 10022.
(6) Mr. Ferrara's shares consist of presently exercisable options to purchase
4,400 shares of Common Stock.
(7) Mr. Finley's shares include presently exercisable options to purchase
142,628 shares of Common Stock.
(8) Mr. Schwartz's shares include presently exercisable options to purchase
106,567 shares of Common Stock. Mr. Schwartz resigned from his position as a
Director of the Company effective April 4, 1997.
(9) Mr. Tworecke's shares include presently exercisable options to purchase
6,000 shares of Common Stock and an indirect beneficial interest in 5,000
shares of Common Stock owned by his wife.
(10) Mr. Ullman's shares consist of presently exercisable options to
purchase 2,000 shares of Common Stock.
(11) Mr. Bank's shares include presently exercisable options to purchase
11,000 shares of Common Stock.
14
<PAGE>
(12) Mr. Giordano's shares include presently exercisable options to purchase
15,000 shares of Common Stock.
(13) Mr. Gladstein may be deemed to beneficially own the Common Stock owned
by Quantum Partners LDC because he is a Managing Director of Soros Fund
Management LLC, which is the principal investment advisor to Quantum
Partners LDC. Mr. Gladstein disclaims beneficial ownership of the shares owned
by Quantum Partners LDC other than his beneficial interest in the Common Stock
through his equity interest in Quantum Partners LDC. Mr. Gladstein's shares
include presently exercisable options to purchase 11,000 shares of Common
Stock.
(14) Mr. Handal's shares include presently exercisable options to purchase
15,000 shares of Common Stock and an indirect beneficial interest in 2,500
shares of Common Stock owned by his wife.
(15) Mr. Preiser may be deemed to beneficially own the Common Stock owned by
Houlihan, Lokey, Howard & Zukin, Inc. because he is a Managing Director of
Houlihan, Lokey, Howard & Zukin, Inc. Mr. Preiser disclaims beneficial
ownership of the shares owned by Houlihan, Lokey, Howard & Zukin, Inc. Mr.
Preiser's shares include presently exercisable options to purchase 15,000 shares
of Common Stock.
(16) Mr. Schneider may be deemed to beneficially own the Common Stock owned by
Acacia National Life Insurance Company because he is the Senior Vice
President, Chief Financial Officer and Chief Investment Officer of Acacia
National Life Insurance Company. Mr. Schneider disclaims beneficial ownership of
the shares owned by Acacia National Life Insurance Company. Mr. Schneider's
shares include presently exercisable options to purchase 23,000 shares of Common
Stock. Mr. Schneider resigned from his position as a Director of the Company
effective April 15, 1997.
(17) Mr. Smith may be deemed to beneficially own the shares of Common Stock
owned by Houlihan, Lokey, Howard & Zukin, Inc. because he is a Managing
Director of Houlihan, Lokey, Howard & Zukin, Inc. Mr. Smith disclaims
beneficial ownership of the shares owned by Houlihan, Lokey, Howard & Zukin,
Inc. other than his beneficial interest in the Common Stock through his equity
interest in Houlihan, Lokey, Howard & Zukin, Inc. Mr. Smith's shares include
presently exercisable options to purchase 23,000 shares of Common Stock. Mr.
Smith resigned from his position as a Director of the Company effective
April 15, 1997.
(18) Mr. Wildrick's shares include presently exercisable options to purchase
15,000 shares of Common Stock.
(19) The total shares owned by the individuals constituting the group of
executive officers and directors (a) include presently exercisable options
to purchase Common Stock as set forth in footnotes (6) through (18); (b)
include shares of Common Stock in which such individuals hold indirect
beneficial interests as set forth in footnotes (9) and (14); and (c) exclude
shares of Common Stock for which such individuals may be deemed beneficial
owners but for which such individuals disclaim beneficial ownership as set
forth in footnotes (13), (15), (16), and (17).
Performance Graph
The graph below compares changes in the cumulative total shareholder return
(change in stock price plus reinvested dividends) for the period from May 3,
1994 (the date of the Company's initial public offering) through February 1,
1997 of an initial investment of $100 invested in (i) the Company's Common
Stock, (ii) the NASDAQ National Market System Corporate Index Market Index and
(iii) the NASDAQ National Market Systems Retail Trades Index Retail Index.
Comparison of Cumulative Return
for period ended February 1, 1997
[Graph appears here]
Nasdaq Stock Market Nasdaq Retail Trade Jos. A. Bank
5/2/94 97 100 100
7/29/94 93 90 80
10/31/94 112 114 60
1/31/95 106 90 30
4/28/95 135 85 30
7/31/95 187 123 30
10/31/95 200 122 30
1/31/96 208 110 20
4/30/96 252 169 25
7/31/96 217 145 46
10/31/96 261 166 30
1/31/97 316 167 42
15
<PAGE>
Proposal No.2
Ratification of the Appointment of Independent Public Accountants
Arthur Andersen LLP is the accounting firm which examined and reported on
the Company's financial statements in Fiscal 1996. The Board has selected the
firm of Arthur Andersen LLP as its independent public accountants for Fiscal
1997. A representative of Arthur Andersen LLP is expected to be present at the
Meeting. Such representative will be given the opportunity to make a statement
at the Meeting if he or she desires and to respond to appropriate questions.
The Board is seeking shareholder ratification of its appointment of Arthur
Andersen LLP. Shareholder ratification requires the affirmative vote of the
holders of a majority of the shares present or represented and entitled to vote
at the Meeting. The Board recommends a vote FOR the ratification of the
appointment of Arthur Andersen LLP and it is intended that shares represented by
the enclosed form of proxy will be voted in favor of the ratification of the
appointment of Arthur Andersen LLP unless otherwise specified in such proxy. If
shareholders do not ratify the appointment of Arthur Andersen LLP as the
independent public accountants of the Company for Fiscal 1997 at the Meeting,
the Board, on recommendation of its Audit Committee, may reconsider the
appointment.
Shareholder Proposals
Any shareholder who intends to present a proposal for action at the
Company's Annual Meeting of Shareholders scheduled to be held on June 9, 1998,
must comply with and meet the requirements of Regulation 14a-8 of the Exchange
Act. That regulation requires, among other things, that a proposal be received
by the Company at its principal executive office, 500 Hanover Pike, Hampstead,
Maryland 21074, Attn: Charles D. Frazer, Esquire, by February 12, 1998.
Other Business
The Board knows of no business that will come before the Meeting for action
except as described in the accompanying Notice of Meeting. However, as to any
such business, the persons designated as proxies will have discretionary
authority to act in their best judgment.
The Board encourages you to have your shares voted by signing and returning
the enclosed form of proxy. The fact that you will have returned your proxy in
advance will in no way affect your right to vote in person should you find it
possible to attend. However, by signing and returning the proxy you have assured
your representation at the Meeting. Thank you for your cooperation.
THE BOARD HOPES THAT SHAREHOLDERS WILL ATTEND THE MEETING. WHETHER OR
NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. PROMPT RESPONSE WILL GREATLY
FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE
APPRECIATED.
16
<PAGE>
JOS. A. BANK CLOTHIERS, INC.
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Timothy F. Finley and Charles D. Frazer, or
either of them, as Proxy or Proxies of the undersigned, each with full power of
substitution and resubstitution, to vote all shares of Common Stock, $.01 par
value per share, of Jos. A. Bank Clothiers, Inc. (the "Company") held of record
by the undersigned on April 25, 1997 at the Annual Meeting of Shareholders to be
held at the Sheraton Inner Harbor Hotel-Baltimore, on June 10, 1997 at 10:00
A.M. Eastern Time, or at any adjournments thereof, as directed below, and in
their discretion on all other matters coming before the meeting or any
adjournments thereof. Any proxy heretofore given by the undersigned with respect
to shares is hereby revoked.
(Please mark boxes [ ] in blue or black ink.)
1. Election of two (2) directors: Timothy F. Finley and Andrew A. Giordano.
(Mark only one of the two boxes for this item)
[ ] VOTE FOR both nominees named above except for that nominee who may
be named on this line:
-----------------------------------
(OR)
[ ] VOTE WITHHELD as to both nominees named above.
2. Ratification of Arthur Andersen LLP as the Company's Independent
Auditors for fiscal year ending January 31, 1998:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued, and to be signed, on the other side.)
<PAGE>
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting. When properly executed, this Proxy will
be voted as directed. If no direction is made, this Proxy will be voted "FOR"
Proposals 1 and 2.
Please sign exactly as name appears on the shares being voted. When shares are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee, guardian or in other representative capacity, please
give full title as such. If a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Date:__________________________________________, 1997
Signature______________________________________
Print Name(s)__________________________________
Signature, if held jointly_____________________
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
