SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant ( )
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))
( ) 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):
( ) 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 LOGO]
JOS. A. BANK CLOTHIERS, INC.
500 Hanover Pike
Hampstead, Maryland 21074
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of
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 9, 1998.
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 January 31, 1998 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 the Proxy
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 9th and discussing with you the
business of your company.
Sincerely,
/s/ Timothy F. Finley
______________________
Timothy F. Finley,
Chairman and Chief Executive Officer
May 1, 1998
<PAGE>
JOS. A. BANK CLOTHIERS, INC.
500 Hanover Pike
Hampstead, Maryland 21074
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
JUNE 9, 1998
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 9,
1998 for the following purposes:
1. To elect three directors for terms expiring in 2001 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 30, 1999;
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 24,
1998 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 regardless
of whether 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,
______________________
Charles D. Frazer,
Secretary
May 1, 1998
<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 9, 1998 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, 1998 to all
shareholders entitled to vote at the Meeting. The Company's Annual Report for
the fiscal year ended January 31, 1998 ("Fiscal 1997") 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
30, 1999 ("Fiscal 1998") 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 24, 1998
(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
-1-
<PAGE>
which (i) instructions have not been received from the beneficial owners or
persons 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 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
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 Robert B. Bank, Gary S. Gladstein and Peter V. Handal for election to
the Board for terms of three years expiring in 2001 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 any or all of the candidates. The Board
recommends a vote FOR Messers Bank, Gladstein and Handal as directors. It is
intended that shares represented by the enclosed form of proxy will be voted in
favor of the election of Messers Bank, Gladstein and Handal as directors.
Messers Bank, Gladstein and Handal are currently directors of the Company. 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 any of the nominees 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.
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 with the Company and the year of the
commencement of the nominees' and continuing directors' service as directors of
the Company.
Director
Name Age Position or Office with the Company Since
- ---- --- ----------------------------------- -----
Nominees for Director with terms expiring in 2001
Robert B. Bank 51 Director 1994
Gary S. Gladstein 53 Director 1989
Peter V. Handal 55 Director 1993
Continuing Directors with terms expiring in 2000
Timothy F. Finley 54 Chairman of the Board,
Chief Executive Officer and Director 1990
Andrew A. Giordano 65 Director 1994
Continuing Directors with terms expiring in 1999
David A. Preiser 40 Director 1990
Robert N. Wildrick 54 Director 1994
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<PAGE>
NOMINEES FOR DIRECTOR WITH TERMS EXPIRING IN 2001
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, a
publicly traded apparel company, as well as a director in several privately held
companies.
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,
a publicly traded natural gas distribution company in Louisiana; I.R.S.A.
Inversiones Y Representaciones S.A., a publicly traded real estate company in
Buenos Aires, Argentina; Cresud, S.A., a publicly traded agriculture company in
Argentina; Global Telesystems Group, Inc., a publicly traded telecommunications
company; The Quantum Dolphin Fund and certain other non-public companies.
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 CEO of J4P
Associates, a real estate concern. Mr. Handal also currently serves as a
director of Cole National Corp., a publicly traded retailing company; and Family
Bargain Corp., a publicly traded retailing company.
CONTINUING DIRECTORS WITH 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. Mr. Finley was Chairman of the
Board of The Finley Group, Inc., a business crisis management group, from 1985
to January 1998. Mr. Finley is also a director of Cole National Corporation, a
publicly traded retailing company; and Venture Stores, Inc., a publicly traded
family value 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. Since February 1998, Mr. Giordano has been the President and Chief
Operating Officer of Graham-Field Health Products, Inc. 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 publicly traded 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,
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<PAGE>
Howard & Zukin, Inc. from 1992 to 1993. Mr. Preiser is a director of NVR,
Inc., a publicly traded home building company.
Robert N. Wildrick has served as a director of the Company since 1994.
Mr. Wildrick has held 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 publicly traded family value retailer(1). 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.
Certain of the Company's directors were elected pursuant to a
stockholders 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 Messers Finley, Handal and
Preiser (together with former Company directors Paul L. Schneider, Henry C.
Schwartz and Donald V. 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.
- ------------
(1) 1 On January 20, 1998, Venture Stores, Inc. filed a petition for relief
under Chapter 11 of the United States Bankruptcy Code in the United States
Bankruptcy Court for the District of Delaware (98-101-RRM).
BOARD AND COMMITTEE MEETINGS
The Board has an Audit Committee, a Compensation Committee and an
Executive Committee (each, a "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 Messers Gladstein
(Chairman), Preiser and Wildrick. The Audit Committee met four times during
Fiscal 1997. During each of the meetings, the Audit Committee had a chance to
discuss matters with the Company's independent public accountants outside the
presence of management. The functions of the Compensation Committee include
supervising the Company's compensation policies, administering the employee
incentive plans, reviewing officers' salaries and bonuses, approving significant
changes in employee benefits and considering other matters referred to it by the
Board. The Compensation Committee is comprised of Messers Bank, Giordano and
Handal (Chairman). The Compensation Committee met five times in Fiscal 1997. The
Executive Committee is comprised of Messers Bank, Finley, Giordano (Chairman),
Handal and Preiser 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 1997, the Executive Committee met one time.
During Fiscal 1997, the Board met seven times (including three telephonic
meetings). Each of the directors attended at least 75% of the total number of
Board and applicable Committee meetings during Fiscal 1997.
-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 and attendance fees of
$2,500 per Board meeting attended and $1,000 per Committee meeting attended. One
half of the usual attendance fee (i.e. $1,250 and $500, respectively) is paid to
each Non-Employee 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 a Committee.
In addition to the monetary compensation described above, under the
Company's 1994 Incentive Plan (the "1994 Incentive Plan"), each Non-Employee
Director is entitled to receive upon his/her appointment as a director 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 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.
Under the 1994 Incentive Plan, each Non-Employee Director is also entitled to
receive annually an immediately exercisable option to purchase up to 1,000
shares of Common Stock at an exercise price equal to the fair market price of
the Common Stock on the date of grant. As of the Record Date, each Non-Employee
Director has received options to purchase up to 24,000 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 to Non-Employee Directors under the 1994 Incentive Plan 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.
EXECUTIVE OFFICERS
The following list contains information on all individuals who were
executive officers of the Company at any time during Fiscal 1997. In December
1997, the Board of Directors reduced the number of corporate officers from
fourteen(1) to eight. As of the Record Date, the Company has six corporate
officers. Former corporate vice presidents are now divisional vice presidents of
their respective areas of responsibility and are no longer corporate officers.
Other than Mr. Finley, who is listed above as a continuing director, the
executive officers of the Company during Fiscal 1997 were:
- ------------
(1) The Company does not consider all of its former corporate officers to be
executive officers.
HARVEY G. BROWN 61 Divisional Vice President, Tailoring, December 1997 to
present; Vice President, Tailoring, December 1995 to December 1997; 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 48 Senior Vice President, Store Operations, December 1997
to present; Vice President, Store Operations, September 1996 to December 1997;
Area Manager and Manager of the Company's Houston store, October 1992 to
September 1996.
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<PAGE>
CHARLES D. FRAZER 39 Senior Vice President, General Counsel, December 1997 to
present; Vice President, General Counsel, March 1994 to December 1997;
Secretary, August 1994 to present; Associate, John P. Healy, P.A., January 1990
to March 1994.
JOHN C. HARRY 59 Senior Vice President, Manufacturing, September 1996 to
March 1997(1); 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.
THOMAS E. POLLEY 64 Treasurer, September 1995 to present; Vice President,
Controller, November 1993 to December 1997; Chief Financial Officer, Curtis
Mathes Corporation, 1990 to April 1993.
HENRY C. SCHWARTZ 68 Vice Chairman, March 1995 to December 1997(2);
Director, May 1991 to June 1997; President and Chief Merchandising Officer,
September 1990 to March 1995.
JAMES W. THORNE 37 Divisional Vice President, Men's Clothing, December
1997 to present. From May 1991 to December, 1997, Mr. Thorne served under
various titles as an officer of the Company with responsibility for
merchandising.
FRANK TWORECKE 51 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")(3), 1994 to 1996; Senior
Vice President, Men's and Children's Division, Lazarus Department Store, 1990 to
1994.
DAVID E. ULLMAN 40 Executive Vice President, Chief Financial Officer,
September, 1995 to present; Chief Administrative Officer, June 1997 to present;
Vice President/Controller, Hanover Direct, Inc., August 1991 to August 1995;
Manager, Arthur Andersen & Co., December 1981 to August 1991.
- ------------
(1) Mr. Harry's employment with the Company was terminated effective March 20,
1998 in connection with the disposal of the Company's manufacturing
operations.
(2) Mr. Schwartz's term of employment with the Company expired on December 31,
1997.
(3) 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 1997, 1996 and
1995.(1)
(1) The tables which follow (Summary Compensation, Aggregated Options and
Option Grants) contain information on Mr. Schwartz, in addition to
information on Mr. Finley and the four other most highly compensated
executive officers of the Company as of the end of Fiscal 1997. The term
of Mr. Schwartz's employment with the Company expired on December 31, 1997.
Had Mr. Schwartz been employed by the Company through the end of Fiscal
1997, he would have been one of the said four other most highly compensated
executive officers.
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<PAGE>
I. SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compen-
Annual Compensation sation
- ----------------------------------------------------------------------------------------------------------------
Securities All Other
Underlying Compen-
Name & Fiscal Salary Bonus Options sation
Principal Position Year ($) ($)(1) (#) ($)(2)
- ----------------------------------------------------------------------------------------------------------------
<S><C>
Timothy F. Finley 1997 $467,870 $385,053 50,000 $8,218
Chairman of the Board and 1996 455,093 343,857 75,000 5,782
Chief Executive Officer 1995 443,323 0 0 8,007
Frank Tworecke(3) 1997 400,000 300,000(4) 40,000 52,677(5)
President and Chief 1996 176,923 175,000 100,000 80,320(6)
Merchandising Officer 1995 0 0 0 0
Henry C. Schwartz 1997 190,328 0 8,000 7,576
Vice Chairman 1996 230,424 0 0 7,596
1995 342,974 0 0 10,177
David E. Ullman(7) 1997 183,421 76,000 20,000 6,907
Executive Vice President, 1996 167,118 69,734 20,000 5,105
Chief Financial & 1995 59,620 0 20,000 590
Administrative Officer
John C. Harry(8) 1997 151,933 61,200 3,000 10,105(9)
Senior Vice President, 1996 72,116 30,326 5,000 3,698(10)
Manufacturing 1995 0 0 0 0
Gary W. Cejka 1997 137,661 55,784 8,000 4,274
Senior Vice President, 1996 107,302 0 5,000 45,411(11)
Store Operations 1995 81,239 0 0 1,288
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
- ------------
(1) Unless otherwise indicated, amounts in the "Bonus" column represent bonuses
attributable to performance in the stated fiscal year. Bonuses are
generally paid after the end of the stated fiscal year.
(2) Amounts in the "All Other Compensation" column represent contributions by
the Company under its 401(k) profit sharing plan and payments by the
Company of certain insurance premiums. Additional items are included where
indicated.
(3) Mr. Tworecke joined the Company in February, 1996.
(4) The amount stated includes a $100,000 bonus paid in Fiscal 1997
attributable to Fiscal 1996 performance.
(5) The amount stated includes forgiveness of principal and interest otherwise
due on the House Loan advanced to Mr. Tworecke pursuant to his employment
agreement with the Company.
(6) The amount stated includes relocation expenses.
(7) Mr. Ullman joined the Company in September, 1995.
(8) Mr. Harry joined the Company in August, 1996.
(9) The amount stated includes a transportation allowance.
(10) No 401(k) contribution was made by the Company for Mr. Harry in Fiscal
1996. The amount stated includes a transportation allowance.
(11) The amount stated includes relocation expenses.
The Summary Compensation Table above excludes certain annual compensation in the
form of perquisites and other personal benefits where the aggregate amount of
such annual compensation does not exceed the lesser of either $50,000 or 10% of
the total of annual salary and bonus reported for each of the named executive
officers.
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<PAGE>
II. AGGREGATED OPTIONS EXERCISES IN FISCAL 1997 AND FISCAL YEAR END OPTION
VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Options /SARS at FY-End at FY-End(1)
Acquired on Value (#) ($)
Exercise Realized -----------------------------------------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------
<S><C>
Timothy F. Finley 0 0 157,214 227,102 0 112,500
Frank Tworecke 0 0 6,000 128,000 23,250 269,250
Henry C. Schwartz 0 0 119,871 0 0 0
David E. Ullman 0 0 4,000 56,000 6,500 56,000
John C. Harry 0 0 0 8,000 0 7,500
Gary W. Cejka 0 0 0 13,000 0 7,500
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
- ------------
(1) Based on a closing price of the Common Stock of $5.50 on January 30, 1998.
III. OPTION GRANTS TABLE
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Individual Grants(1) Potential Realization Value At
- ------------------------------------------------------------------------------ Assumed Annual Rates Of Stock
Number Of Percent Of Price Appreciation For Option
Securities Total Options Term
Underlying Granted to Exercise Or ---------------------------------
Options Employees In Base Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
(a) (b) (c) (d) (e) (f) (g)
- ----------------------------------------------------------------------------------------------------------------
<S><C>
Timothy F. Finley 50,000 29.9% $ 6.000 10/06/07 $ 188,668 $ 478,123
Frank Tworecke 40,000 23.9% 6.000 10/06/07 150,935 382,498
Henry C. Schwartz(2) 8,000 4.8% 7.375 08/01/99 0 0
David E. Ullman 20,000 12.0% 6.000 10/06/07 75,467 191,249
John C. Harry 3,000 1.8% 6.000 10/06/07 11,320 28,687
Gary W. Cejka 8,000 4.8% 6.000 10/06/07 30,187 76,500
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
- ------------
(1) Unless otherwise indicated, the individual grants consist of options to
purchase common stock granted as of October 6, 1997. Subject to the terms
and conditions of the relevant option agreements, 25% of such options will
vest on each October 6, 1999 thru 2002, after which such options will be
exercisable as to all shares.
(2) Mr. Schwartz's options vested immediately upon issuance on April 14, 1997.
The exercise price of the options ($7.375) was above the market price of
the Common Stock on the date of grant ($4.063). The options have no
potential realization value at the assumed annual rates of price
appreciation for the option term.
EXECUTIVE EMPLOYMENT AGREEMENTS
Timothy F. Finley
Mr. Finley is employed by the Company pursuant to an amended and
restated employment agreement expiring March 31, 1999, subject to automatic one
year extensions. Under the employment agreement, Mr. Finley currently receives
an annual base salary of $468,239. Mr. Finley is entitled to an annual
performance-based bonus of
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<PAGE>
75% of his base salary, conditioned upon satisfaction of certain performance
goals set by the Compensation Committee of the Board for Mr. Finley and the
Company. In addition, the Compensation Committee may grant to Mr. Finley a
discretionary bonus of up to 25% of his base salary. 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" (including, under certain circumstances, a change in control
of the Company), Mr. Finley shall be entitled to receive (a) base salary for a
period of thirty (30) months following the date of termination (calculated at
the applicable base salary rate which would have been in effect for each year
during the balance of the employment period, assuming no termination) payable in
equal installments at the times base salary would have been paid had the
employment period not been terminated; (b) a prorated portion of the bonus for
the then current bonus year and (c) if applicable, the bonus for the last full
bonus year. Certain other employment benefits shall be continued at the expense
of the Company for the period that payments are required to be made. 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. Pursuant to the
employment agreement, the Company has advanced to Mr. Finley a personal loan in
the principal amount of $40,200. The loan bears interest at the Applicable
Federal Rate determined in accordance with Internal Revenue Service regulations.
Payments on the loan otherwise due during Mr. Finley's term of employment with
the Company will be forgiven. The loan may be forgiven in full or in part under
certain circumstances. Part of the loan will be forgiven if Mr. Finley continues
his employment with the Company for five years.
Henry C. Schwartz
Mr. Schwartz was employed by the Company in Fiscal 1997 pursuant to a
now expired amended employment agreement dated as of February 3, 1996. Pursuant
to such agreement, Mr. Schwartz received 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 was in the form of deferred compensation which was paid to Mr. Schwartz
in equal installments between April 1 and December 31, 1997. Mr. Schwartz was
not entitled to consideration for an annual bonus. Mr. Schwartz's term of
employment with the Company expired on December 31, 1997.
Frank Tworecke
Mr. Tworecke is employed by the Company pursuant to an amended and
restated employment agreement expiring February 4, 1999, subject to automatic
one year extensions. Under the employment agreement, Mr. Tworecke currently
receives an annual base salary of $400,000. In addition, Mr. Tworecke will be
entitled to an annual bonus of 75% of his base salary, conditioned upon the
satisfaction of certain performance goals set by the Compensation Committee of
the Board for Mr. Tworecke and the Company. 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" (including, under certain circumstances, a change in control of
the Company), Mr. Tworecke shall be entitled to receive (a) base salary for a
period of thirty (30) months following the date of termination (calculated at
the applicable base salary rate which would have been in effect for each year
during the
-9-
<PAGE>
balance of the employment period, assuming no termination) payable in equal
installments at the times base salary would have been paid had the employment
period not been terminated; (b) a prorated portion of the bonus for the then
current bonus year and (c) if applicable, the bonus for the last full bonus
year. Certain other employment benefits shall be continued at the expense of the
Company for the period that payments are required to be made. 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. Pursuant to the employment
agreement, the Company has advanced to Mr. Tworecke a house loan in the
principal amount of $200,000 (the "House Loan") and a personal loan in the
principal amount of $45,000 (the "Personal Loan"). Each loan bears interest at
the Applicable Federal Rate determined in accordance with Internal Revenue
Service regulations. Payments on the loans otherwise due during Mr. Tworecke's
term of employment with the Company will be forgiven. The loans may be forgiven
in full or in part under certain circumstances. Part of the loans (including all
of the House Loan) will be forgiven if Mr. Tworecke continues his employment
with the Company for five years from the respective dates of the loans.
David E. Ullman
Mr. Ullman is employed by the Company pursuant to an amended and
restated employment agreement expiring September 30, 1998, subject to automatic
one year extensions. Under the employment agreement, Mr. Ullman currently
receives an annual base salary of $190,000. In addition, Mr. Ullman is entitled
to an annual bonus of 40% of his base salary, conditioned upon the satisfaction
of certain performance goals set by the Compensation Committee of the Board for
Mr. Ullman and the Company. 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, under certain
circumstances, a change in control of the Company), Mr. Ullman shall be entitled
to receive (a) base salary for a period of eighteen (18) months following the
date of termination (calculated at the applicable base salary rate which would
have been in effect for each year during the balance of the employment period,
assuming no termination) payable in equal installments at the times base salary
would have been paid had the employment period not been terminated; (b) a
prorated portion of the bonus for the then current bonus year and (c) if
applicable, the bonus for the last full bonus year. Certain other employment
benefits shall be continued at the expense of the Company for the period that
payments are required to be made. 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).
John C. Harry
Mr. Harry was employed by the Company in Fiscal 1997 pursuant to an
employment agreement which was terminated by the Company without cause as of
March 20, 1998, in connection with the Company's disposal of its manufacturing
operations. Under the employment agreement, Mr. Harry received in Fiscal 1997 an
annual base salary of $153,000. In addition, Mr. Harry was entitled to an annual
bonus of 40% of his base
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<PAGE>
salary, conditioned upon the satisfaction of certain performance goals set by
the Compensation Committee of the Board for Mr. Harry and the Company. The
Company was entitled to terminate the employment agreement at any time. Since
the employment agreement was terminated by the Company "without cause", Mr.
Harry is entitled to receive (a) base salary for a period of twelve (12) months
following the date of termination (calculated at the applicable base salary rate
which would have been in effect for each year during the balance of the
employment period, assuming no termination) payable in equal installments at the
times base salary would have been paid had the employment period not been
terminated; (b) the bonus for Fiscal 1997 and (c) a lump sum payment in the
amount of $19,000.00. Certain other employment benefits shall be continued at
the expense of the Company for the period that payments are required to be made.
Mr. Harry is subject to non-competition restrictions for so long as any
severance payments are being made.
Gary W. Cejka
Mr. Cejka is employed by the Company pursuant to an employment
agreement expiring September 30, 1998, subject to automatic one year extensions.
Under the employment agreement, Mr. Cejka currently receives an annual base
salary of $139,400. In addition, Mr. Cejka is entitled to an annual bonus of 40%
of his base salary, conditioned upon the satisfaction of certain performance
goals set by the Compensation Committee of the Board for Mr. Cejka and the
Company. The Company may terminate the employment agreement at any time. Mr.
Cejka may terminate the employment agreement upon 60 days written notice. If the
employment agreement is terminated by the Company "without cause" or by Mr.
Cejka for "good reason" (including, under certain circumstances, a change in
control of the Company), Mr. Cejka shall be entitled to receive (a) base salary
for a period of twelve (12) months following the date of termination (calculated
at the applicable base salary rate which would have been in effect for each year
during the balance of the employment period, assuming no termination) payable in
equal installments at the times base salary would have been paid had the
employment period not been terminated; (b) a prorated portion of the bonus for
the then current bonus year and (c) if applicable, the bonus for the last full
bonus year. Certain other employment benefits shall be continued at the expense
of the Company for the period that payments are required to be made. The
agreement provides that Mr. Cejka 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. Cejka without "good reason",
for the remaining term of employment (assuming no termination).
Charles D. Frazer
Mr. Frazer is employed by the Company pursuant to an employment
agreement expiring September 30, 1998, subject to automatic one year extensions.
Under the employment agreement, Mr. Frazer currently receives an annual base
salary of $120,000. In addition, Mr. Frazer is entitled to an annual bonus of
40% of his base salary, conditioned upon the satisfaction of certain performance
goals set by the Compensation Committee of the Board for Mr. Frazer and the
Company. The Company may terminate the employment agreement at any time. Mr.
Frazer may terminate the employment agreement upon 60 days written notice. If
the employment agreement is terminated by the Company "without cause" or by Mr.
Frazer for "good reason" (including, under certain circumstances, a change in
control of the Company), Mr. Frazer shall be entitled to receive (a) base salary
for a period of twelve (12) months following the date of termination
-11-
<PAGE>
(calculated at the applicable base salary rate which would have been in effect
for each year during the balance of the employment period, assuming no
termination) payable in equal installments at the times base salary would have
been paid had the employment period not been terminated; (b) a prorated portion
of the bonus for the then current bonus year and (c) if applicable, the bonus
for the last full bonus year. Certain other employment benefits shall be
continued at the expense of the Company for the period that payments are
required to be made. The agreement provides that Mr. Frazer 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.
Frazer without "good reason", for the remaining term of employment (assuming no
termination).
CERTAIN TRANSACTIONS
From 1990 through Fiscal 1996, The Finley Group, a business crisis
management group of which Mr. Finley was the Chairman of the Board and part
owner, 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 1995 and 1996, The Finley Group was paid
$68,600 and $31,300, respectively, for such services. No fees were paid to The
Finley Group by the Company in Fiscal 1997.
In accordance with the terms of Mr. Tworecke's employment agreement,
the Company loaned to Mr. Tworecke $200,000 in Fiscal 1996 and $45,000 in Fiscal
1998. As of the end of Fiscal 1997, a total principal sum of approximately
$218,333 remains outstanding. 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 1997, and Forms 5 and amendments thereto, received by it with respect
to Fiscal 1997, 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 except (a) Mr. Bank filed a Form 4
on March 25, 1998; and (b) Mr. Brown, Mr. Cejka, Mr. Finley, Mr. Frazer, Mr.
Harry, Mr. Polley, Mr. Schwartz, Mr. Thorne, Mr. Tworecke and Mr. Ullman
filed Form 5's on April 7, 1998. Each of the Form 5's included the report of a
Form 4 transaction (i.e. the October 6, 1997 grant of options).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During Fiscal 1997, the Compensation Committee was comprised of
Messers. Bank, Giordano and Handal. 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
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<PAGE>
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 achieve 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 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
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<PAGE>
Compensation Committee. For Fiscal 1997, all of the Company's officers (other
than Mr. Schwartz) and certain key managers (as determined by the Compensation
Committee upon recommendation of the Chief Executive Officer) were included in
the Fiscal 1997 Management Incentive Plan (the "Bonus Plan"). Maximum potential
awards under the Bonus Plan ranged from 10% to 75% of the participants' base
salaries. For those executive officers employed by the Company pursuant to
written employment agreements, bonus percentages 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")(1), 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
1997, the first EBIT Goal was $6.0 million and the second EBIT Goal was $7.0
million. Except as otherwise determined in the discretion of the Compensation
Committee, no bonuses were payable under the Bonus Plan unless the Company's
EBIT had been at least equal to the first EBIT Goal (regardless of whether a
Bonus Plan participant satisfied his/her Performance Goals). If the first EBIT
Goal had been reached, each participant would have been entitled to receive a
bonus equal to 25% of his/her maximum potential award. If the second EBIT Goal
had been reached, each participant would have been entitled to instead receive a
bonus equal to 50% of his/her maximum potential award. If the Company's EBIT had
been between the first EBIT Goal and the second EBIT Goal, the EBIT Goal-based
award would have been prorated between 25% and 50% of the maximum potential
award. Assuming an EBIT Goal-based bonus had been awarded, each participant who
satisfied his/her Performance Goals would have been entitled to receive twice
the amount (i.e. between 50% and 100% of the maximum potential award) otherwise
payable as a result of the Company's satisfaction of the EBIT Goals. The
Company's EBIT in Fiscal 1997 was approximately $7.9 million, an amount in
excess of the second EBIT Goal. Therefore, maximum available bonuses were paid
to all participants who satisfied their Performance Goals.
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(1) For Fiscal 1997, calculation of the Company's EBIT excluded the one-time
charge associated with disposal of the Company's manufacturing operations.
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.
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<PAGE>
In Fiscal 1997, the Compensation Committee approved an amendment to the
1994 Incentive Plan to provide that all awards previously or in the future
issued under the plan shall vest in full upon a "Change of Control."(1)
- ------------
(1) A "Change of Control" shall be deemed to have occurred if, as a result of a
single transaction or a series of transactions, (a) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a
trustee or other fiduciary holding securities under any employee benefit
plan of the Company or a corporation owned, directly or indirectly, by the
stockholders of the Company (including any nominee corporation that holds
shares of the Company on behalf of the beneficial owners of such
corporation), in substantially the same proportions as their ownership of
stock of the Company, is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities
of the Company representing 51% or more of the combined voting power of the
Company's then outstanding securities; or (b) the stockholders of the
Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 70% of
the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's
assets.
CHIEF EXECUTIVE OFFICER COMPENSATION
The base salary for Mr. Finley, Chairman and Chief Executive Officer of
the Company, for Fiscal 1997 was $467,870. Mr. Finley's salary was determined
pursuant to an employment agreement between the Company and Mr. Finley. Mr.
Finley received in Fiscal 1997 options to purchase up to 50,000 shares of Common
Stock. 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
$385,053 was payable to Mr. Finley for Fiscal 1997. As approved by the
Compensation Committee early in 1997, the primary criteria upon which Mr.
Finley's bonus was based were increasing volume levels on a profitable basis,
improving the Company's brand awareness and increasing profit margins.
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.(1)
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(1) All information is as of the Record Date (unless otherwise disclosed) 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 of the Record Date. 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, entity or
group.
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<PAGE>
<TABLE>
<CAPTION>
Name of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
---------------- --------------------- --------
<S><C>
AWM Investment Co., Inc. and Affiliates 1,018,500(2) 15.00
Quantum Partners LDC 616,401(3) 9.08
Dimensional Fund Advisors Inc. 514,000(4) 7.57
Paradigm Capital Management, Inc. 357,200(5) 5.26
Gary W. Cejka 0 0.00
John C. Harry 0 0.00
Timothy F. Finley 252,306(6) 3.62
Henry C. Schwartz 199,871(7) 2.89
Frank Tworecke 91,000(8) 1.34
David E. Ullman 7,333(9) *
Robert B. Bank 26,000(10) *
Andrew A. Giordano 21,000(11) *
Gary S. Gladstein 47,239(12) *
Peter V. Handal 29,500(13) *
David A. Preiser 68,862(14) 1.01
Robert N. Wildrick 33,000(15) *
All executive officers and directors
as a group (16 persons) 805,208(16) 11.09
</TABLE>
* Less than 1%.
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(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, New York 10022.
(3) The business address of Quantum Partners LDC is c/o Curacao Corporation
Company N.V., Kaya Flamboyan 9, Willemstad, Curacao, Netherlands
Antilles.
(4) The business address of Dimensional Fund Advisors Inc. is 1299 Ocean
Avenue, 11th Floor, Santa Monica, California 90401. Dimensional Fund
Advisors Inc. ("Dimensional"), a registered investment advisor, is deemed
to have beneficial ownership of 514,000 shares of Common Stock as of
December 31, 1997, all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc., a registered open-end investment
company, or in series of the DFA Investment Trust Company, a Delaware
business trust, or the DFA Group Trust and DFA Participation Group Trust,
investment vehicles for qualified employee benefit plans, all of which
Dimensional serves as investment manager. Dimensional disclaims
beneficial ownership of all such shares.
(5) The business address of Paradigm Capital Management, Inc. is 9 Elk
Street, Albany, New York 12207. Paradigm's holdings are stated as of
December 31, 1997.
(6) Mr. Finley's shares include presently exercisable options to purchase
181,524 shares of Common Stock.
(7) Mr. Schwartz's shares include presently exercisable options to
purchase 119,871 shares of Common Stock. Mr. Schwartz resigned from his
position as a Director of the Company effective April 4, 1997. Mr.
Schwartz's term of employment with the Company expired December 31,
1997.
(8) Mr. Tworecke's shares include presently exercisable options to purchase
22,000 shares of Common Stock and an indirect beneficial interest in
14,000 shares of Common Stock owned by members of his immediate family.
(9) Mr. Ullman's shares consist of presently exercisable options to purchase
7,333 shares of Common Stock.
(10) Mr. Bank's shares include presently exercisable options to purchase
16,000 shares of Common Stock.
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<PAGE>
(11) Mr. Giordano's shares include presently exercisable options to purchase
20,000 shares of Common Stock.
(12) 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
16,000 shares of Common Stock.
(13) Mr. Handal's shares include presently exercisable options to purchase
20,000 shares of Common Stock and an indirect beneficial interest in
2,500 shares of Common Stock owned by his wife.
(14) Mr. Preiser may be deemed to beneficially own 4,488 shares of 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 20,000 shares of Common Stock.
(15) Mr. Wildrick's shares include presently exercisable options to purchase
20,000 shares of Common Stock.
(16) 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
(15); (b) include shares of Common Stock in which such individuals hold
indirect beneficial interests as set forth in footnotes (8) and (13); 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 (12) and (14).
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 January 30,
1998 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.
[GRAPH APPEARS HERE - PLOT POINTS BELOW]
Comparison of Cumulative Return
for period ending February 1, 1997
Nasdaq Stock Market Naqdaq 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
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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 1997. The Board has selected the
firm of Arthur Andersen LLP as its independent public accountants for Fiscal
1998. 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 1998 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 8, 1999,
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 11, 1999.
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.
-18-
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 24, 1998 at the Annual Meeting of Stockholders to be
held at the Sheraton Inner Harbor Hotel--Baltimore, on June 9, 1998 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 three (3) directors: Robert B. Bank, Gary S. Gladstein and
Peter V. Handal
(Mark only one of the two boxes for this item)
[ ] VOTE FOR all nominees named (OR) [ ] VOTE WITHHELD as to all nominees
above except for that named above.
nominee(s) who may be named
on this line:
2. Ratification of Arthur Andersen LLP as the Company's Independent Auditors for
fiscal year ending January 30, 1999:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued, and to be signed, on the other side.)
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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:_______________________________________________________, 1998
Signature_________________________________________________________
Print Name(s)_____________________________________________________
Signature, if held jointly________________________________________
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
