SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or
Rule 14a-12
[ ] Confidential, For Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
Trend-Lines, Inc.
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if Other Than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
14a-6(I)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
(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:
Notice of Annual Meeting of Stockholders of
Trend-Lines, Inc.
To Be Held on July 13, 1998
The Annual Meeting of Stockholders of Trend-Lines, Inc.
will be held on July 13, 1998 at 11:00 a.m., local time, at
the offices of the Company, 135 American Legion Highway,
Revere, Massachusetts 02151 for the following purposes:
1. To elect six (6) directors to serve for the
ensuing year and until their successors are duly elected.
2. To consider and act upon a proposal to amend the
Company's 1993 Employee Stock Option Plan to increase from
1,525,000 to 2,275,000 the total number of shares of the
Company's Class A Common Stock reserved for issuance
thereunder.
3. To consider and act upon any matters incidental to
the foregoing purposes and any other matters which may
properly come before the Meeting or any adjourned session
thereof.
The Board of Directors has fixed June 5, 1998 as the
record date for determining the stockholders entitled to
notice of, and to vote at, the Meeting.
You are cordially invited to attend the Meeting.
By Order of the Board of Directors
/s/ Richard A. Binder
Richard A. Binder, Clerk
Boston, Massachusetts
June 8, 1998
YOUR VOTE IS IMPORTANT
____________________________________________________________
_____________________________
TO ASSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE URGED
TO VOTE, SIGN, DATE AND RETURN THE ENCLOSED PROXY AS
PROMPTLY AS POSSIBLE IN THE POSTAGE-PAID ENVELOPE ENCLOSED
FOR THAT PURPOSE. EVEN IF YOU HAVE GIVEN YOUR PROXY, THE
PROXY MAY BE REVOKED AT ANY TIME PRIOR TO EXERCISE BY FILING
WITH THE CLERK OF THE COMPANY A WRITTEN REVOCATION, BY
EXECUTING A PROXY WITH A LATER DATE, OR BY ATTENDING AND
VOTING AT THE MEETING.
____________________________________________________________
TREND LINES, INC.
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
To Be Held on July 13, 1998
This proxy statement is furnished in connection with
the solicitation of proxies by the Board of Directors of
Trend-Lines, Inc., a Massachusetts Corporation (the
"Company"), with its principal executive offices at 135
American Legion Highway, Revere, Massachusetts 02151 for use
at the Annual Meeting of Stockholders to be held on July 13,
1998, and at any adjournment or adjournments thereof (the
"Meeting"). The enclosed proxy relating to the Meeting is
solicited on behalf of the Board of Directors of the Company
and the cost of such solicitation will be borne by the
Company. It is expected that this proxy statement and the
accompanying proxy will be mailed to stockholders on or
about June 8, 1998. Certain of the officers and regular
employees of the Company may solicit proxies by
correspondence, telephone or in person, without extra
compensation. The Company may also pay to banks, brokers,
nominees and certain other fiduciaries their reasonable
expenses incurred in forwarding proxy material to the
beneficial owners of securities held by them.
Only stockholders of record at the close of business on
June 5, 1998 will be entitled to receive notice of, and to
vote at, the Meeting. As of May 12,1998, there were
outstanding and entitled to vote 5,922,991 shares of Class A
Common Stock, $.01 par value (the "Class A Common Stock"),
and 4,726,794 shares of Class B Common Stock, $.01 par value
(the "Class B Common Stock"), of the Company.
The holders of Class A Common Stock are entitled to one
vote per share, and the holders of Class B Common Stock are
entitled to ten votes per share, with the holders of both
classes of Common Stock voting together as a single class.
The directors of the Company will be elected by a plurality
of the votes cast. Approval of the amendment to the 1993
Employee Stock Option Plan described in Proposal No. 2
requires the affirmative vote of at least a majority of the
combined voting power of the outstanding shares of Class A
Common Stock and Class B Common Stock, voting together as a
single class and represented at the Meeting.
The enclosed proxy, if executed and returned, will be
voted as directed on the proxy or, in the absence of such
direction, for the election of the nominees as directors and
for Proposal No. 2 below. If any other matters shall
properly come before the Meeting, the enclosed proxy will be
voted by the proxies in accordance with their best judgment.
The proxy may be revoked at any time prior to exercise by
filing with the Clerk of the Company a written revocation,
by executing a proxy with a later date, or by attending and
voting at the Meeting.
The Company's Annual Report to Stockholders for the
fiscal year ended February 28, 1998, including financial
statements audited by Arthur Andersen LLP, is being mailed
to each of the stockholders simultaneously with this proxy
statement.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the Meeting, six directors are to be elected to
serve until the 1999 Annual Meeting of Stockholders and
until their respective successors have been duly elected and
qualified. The persons listed below in the following table
have been nominated by the Nominating Committee of the Board
of Directors for election as directors.
All nominees are currently directors of the Company and
all were elected by the stockholders at the last Annual
Meeting. It is the intention of the persons named as proxies
to vote for the election of the nominees. In the
unanticipated event that any such nominee should be unable
to serve, the persons named as proxies will vote the proxy
for such substitutes, if any, as the Nominating Committee
may designate. The nominees have not been nominated
pursuant to any arrangement or understanding with any
person.
The following table sets forth certain information with
respect to the nominees.
DIRECTOR
NAME AGE POSITION SINCE
Stanley D. Black 61 Chairman of the Board 1981
(1)(2) and Chief Executive
Officer
Richard Griner (2) 54 President and Chief 1996
Operating Officer and
Director
Karl P. Sniady 45 Executive Vice 1995
President, Finance and
Administration, Chief
Financial Officer and
Director
Ronald L. Franklin 52 Vice President, 1994
(3) Finance, Treasurer and
Director
Richard A. Mandell 56 Director 1995
(3)
Irwin W. Winter (1) 64 Director 1997
(3)
_________________________
(1) Member of the Company's Compensation and Stock Option
Committee.
(2) Member of the Company's Nominating Committee.
(3) Member of the Company's Audit Committee.
Stanley D. Black, founder of the Company, has served as
Chief Executive Officer and Chairman of the Board of
Directors of the Company since its organization in 1981.
Richard Griner, a Director of the Company since October
1996, has been President and Chief Executive Officer since
October 1996. From March 1995 to September 1996, Mr. Griner
was retired. For more than five years prior to March 1995,
Mr. Griner was Senior Vice President of Store Operations for
Family Dollar Stores. Prior to joining Family Dollar Stores
in 1986, Mr. Griner was Division Manager of Southland
Corporation.
Karl P. Sniady, a Director of the Company since October
1995, has been Executive Vice President of the Company since
June 1995 and Chief Financial Officer since September 1995.
From 1990 to 1995, Mr. Sniady was Chief Financial Officer of
Auto Source, Inc., an automotive after-market retailer and
subsidiary of Canadian Tire.
Ronald L. Franklin, a Director of the Company since May
1994, has been Vice President, Finance since March 1987.
From February 1985 until March 1987, Mr. Franklin has served
as Controller of the Company, and he has also served as
Treasurer since April, 1994.
Richard A. Mandell, a Director of the Company since
October 1995, is a private investor. From January 1996 to
February 1998, Mr. Mandell was a Vice President -- Private
Investments of Clariden Asset Management (NY) Inc., a
subsidiary of Clariden Bank, a private Swiss bank. From
1982 until June 1995, Mr. Mandell served as a Managing
Director of Prudential Securities Incorporated, an
investment banking firm. Mr. Mandell is also a director of
Sbarro, Inc. and USA Detergents, Inc.
Irwin W. Winter, a Director of the Company since
January 1997, has been Executive Vice President and Chief
Financial Officer and a director of Phillips Van Heusen
Corp., a wholesaler and retailer of branded apparel since
1987.
The address of each person named in the table above is
c/o Trend-Lines, Inc., 135 American Legion Highway, Revere,
Massachusetts 02151.
Meetings of the Board of Directors and Committees
The Board of Directors of the Company held five
meetings during the fiscal year ended February 28,1998. The
Board of Directors acted on one occasion by unanimous
written consent in lieu of a special meeting. Each director
attended at least 75% of the aggregate number of all
meetings of the Board of Directors and committees of which
they were members during such fiscal year.
The Board of Directors has an Audit Committee, formed
in July 1994, currently composed of Messrs. Mandell, Winter
and Franklin. The functions performed by this Committee
include recommending to the Board of Directors the
engagement of the independent auditors, reviewing the scope
of internal controls and reviewing the implementation by
management of recommendations made by the independent
auditors. The Audit Committee met twice in fiscal 1997.
Until July 19, 1995, the Board of Directors had a
Compensation Committee, formed in July 1994, and a separate
Stock Option committee, formed in September 1993. On July
19, 1995, the Company's Compensation Committee and Stock
Option Committee were combined into a single Compensation
and Stock Option Committee. The functions of the
Compensation and Stock Option Committee include the review
of existing and proposed employment arrangements and the
making of recommendations to the Board of Directors with
respect to all forms of remuneration to any officer or
director of the Company. This Committee is also responsible
for making determinations with respect to all matters
pertaining to the grant of stock options under the Company's
stock option plans. The Compensation and Stock Option
Committee, currently composed of Messrs. Black and Winter,
met once in fiscal 1997.
The Board of Directors has a Nominating Committee,
formed in May 1994, which was composed of Messrs. Black and
Griner during fiscal 1997 The Nominating Committee is
responsible for recommending director nominees, Board of
Director committee members and non-management directors'
compensation to the Board of Directors. The Nominating
Committee did not have a procedure whereby it will consider
nominees recommended by security-holders. The Nominating
Committee did not meet during fiscal 1997 and its functions
were undertaken directly by the Board of Directors of the
Company during fiscal 1997.
Compensation of Directors
Directors who are not full-time employees of the
Company receive a fee of $2,000 for each Board meeting.
Directors are also entitled to an annual retainer of $5,000,
payable in 50% installments in January and July. Directors
are also entitled to receive reimbursement for traveling
costs and other out-of-pocket expenses incurred in attending
Board meetings. Directors who are not also employees of the
Company are eligible to participate in the Company's 1994
Non-Qualified Stock Option Plan for Non-Employee Directors
(the "1994 Non-Qualified Stock Option Plan"). Non-employee
directors are automatically granted options to purchase
7,500 shares of Class A Common Stock pursuant to the 1994
Non-Qualified Stock Option Plan upon becoming a director,
which options are subject to vesting three years after date
of grant and expire ten years after date of grant, and
options to purchase 1,000 additional shares in each year
thereafter based upon the formula provisions of such Plan.
Pursuant to action taken by the Board of Directors in August
1996, the exercise price of options previously issued to
Directors under the 1994 Non-Qualified Stock Option Plan was
adjusted to $4.00 per share, which was the closing bid for
the Class A Common Stock on the Nasdaq National Market as of
the close of business on the day preceding the date such
action was taken.
Indemnification Agreements
The Company has entered into indemnification agreements
with each of its directors and anticipates that it will
enter into similar agreements with any future directors.
Generally, the indemnification agreements attempt to provide
the maximum protection permitted by Massachusetts law with
respect to indemnification of directors.
The indemnification agreements provide that the Company
will pay certain amounts incurred by a director in
connection with any civil or criminal action or proceeding
and specifically including actions by or in the name of the
Company (derivative suits) where the individual's
involvement is by reason of the fact that he is or was a
director. Such amounts include, to the maximum extent
permitted by law, attorney's fees, judgments, civil or
criminal fines, settlement amounts, and other expenses
customarily incurred in connection with legal proceedings.
Under the indemnification agreements, a director will not
receive indemnification unless he is found to have acted in
good faith and in a manner he reasonably believed to be in,
or not opposed to, the best interests of the Company.
Security Ownership
The following table sets forth certain information as
of May 12, 1998 with respect to the beneficial ownership of
the Company's Class A Common Stock and Class B Common Stock
by each nominee for director, each named executive office in
the Summary Compensation Table under "Executive
Compensation" below, all directors and executive officers as
a group, and each person known by the Company to be the
beneficial owner of 5% or more of the Company's Class A
Common Stock or Class B Common Stock. This information is
based upon information received from or on behalf of the
named persons.
Class A Common Stock
Name and Address of
Beneficial Owner (1) Shares Percent of Class
Beneficially
Owned
Stanley D. Black (2)(3) 4,230,282 42.2%
Emilia F. Black (2)(4) 2,555,772 30.6%
The Kaufmann Fund, Inc. (5) 613,800 10.4%
Wellington Management Company,
LLP (6) 385,000 6.5%
Dimensional Fund Advisors Inc. 383,500 6.5%
(7)
Richard Griner -- --
Karl P. Sniady 11,250 *
Ronald L. Franklin (8) 73,202 *
Norman W. Zagorsky(8)(9) 80,452 *
Richard A. Mandell(10) 6,000 *
Irwin W. Winter 300 *
All directors and executive
officers as a group (7 persons) 4,401,486 43.2%
Class B Common Stock Shares
Name and Address of Beneficially
Beneficial Owner (1) Owned Percent of Class
Stanley D. Black (3) 4,102,469 86.8%
Emilia F. Black (4) 2,427,959 51.4%
All directors and
executive officers as
a group (7 persons) 4,102,469 86.8%
_____________________________
* Less than 1% of the outstanding Class A Common Stock.
(1) The persons listed in the tables own of record the
shares of Class A Common Stock and Class B Common Stock
listed opposite their respective names, and have sole
voting and investment power with respect to such shares
of Common Stock, unless otherwise indicated. The
mailing address of Stanley D. Black and Emilia F. Black
is c/o Trend-Lines, Inc., 135 American Legion Highway,
Revere, Massachusetts 02151.
(2) Includes shares of Class B Common Stock which are
convertible at any time into Class A Common Stock on a
share-for-share basis.
(3) Mr. Black has sole voting and investment control with
respect to 9,313 shares of Class A Common Stock and
shares voting and investment control with his spouse,
Emilia F. Black, with respect to an additional 118,500
shares of Class A Common Stock. Of the aggregate
4,102,469 shares of Class B Common Stock deemed
beneficially owned by Mr. Black, 1,100,000 shares are
held of record by a limited partnership (the "Limited
Partnership") of which Mr. Black and Mrs. Black are the
general partners and share voting and investment power.
All other shares are held of record by various trusts
created by Mr. Black and/or Mrs. Black. Mr. Black has
sole voting and investment power with respect to
2,675,807 of the 4,102,469 shares of Class B Common
Stock deemed beneficially owned by him. Mr. Black does
not currently have voting or investment power with
respect to 326,662 shares of Class B Common Stock
deemed beneficially owned by him, but has the right, in
his capacity as a settlor of a certain trust, to
acquire such 326,662 shares. Except for these 326,662
shares and the 1,100,000 shares held of record by the
Limited Partnership, Mr. Black disclaims beneficial
ownership of all shares listed as beneficially owned by
Mrs. Black. Of the aggregate 4,102,469 shares of Class
B Common Stock deemed beneficially owned by Mr. Black,
1,792,749 are also deemed beneficially owned by Mrs.
Black. As a result of the Class B Common Stock having
ten votes per share, as of May 12, 1998, Mr. Black
beneficially owned shares representing approximately
77.4% of the combined voting power of the outstanding
Common Stock.
(4) Emilia F. Black shares voting and investment control
with her spouse, Stanley D. Black, with respect to
118,500 shares of Class A Common Stock. Mrs. Black
does not currently have voting or investment power with
respect to 9,313 shares of Class A Common Stock deemed
beneficially owned by her, but has the right, in her
capacity as settlor of a certain trust, to acquire such
shares. Of the aggregate 2,427,959 shares of Class B
Common Stock deemed beneficially owned by Mrs. Black,
1,100,000 shares are held of record by the Limited
Partnership of which Mrs. Black and Mr. Black are the
general partners and share voting and investment power.
All other shares are held of record by various trusts
created by Mr. Black and/or Mrs. Black. Mrs. Black has
sole voting and investment power with respect to
967,852 of the 2,427,959 shares of Class B Common Stock
deemed beneficially owned by her. Mrs. Black does not
currently have voting or investment power with respect
to the aggregate of 381,087 shares of Class B Common
Stock deemed beneficially owned by her, but has the
right, in her capacity as settlor of certain trusts, to
acquire such shares. Except for these 381,087 shares
and the 1,100,000 shares held of record by the Limited
Partnership, Mrs. Black disclaims beneficial ownership
of all shares listed as beneficially owned by Mr.
Black. Of the aggregate 2,427,959 shares of Class B
Common Stock deemed beneficially owned by Mrs. Black,
1,792,749 shares (including the aggregate 1,100,000
held of record by a limited partnership as noted above)
are also deemed beneficially owned by Mr. Black. As a
result of the Class B Common Stock having 10 votes per
share, as of May 12, 1998, Mrs. Black beneficially
owned shares representing approximately 45.9% of the
combined voting power of the outstanding Common Stock.
(5) According to a Schedule 13G, dated December 31, 1997,
filed with the Securities and Exchange Commission (the
"Commission") by The Kaufmann Fund, Inc. ("Fund"), an
investment company registered under Section 8 of the
Investment Company Act, the Fund was the beneficial
owner of 613,800 shares of Class A Common Stock and
that it has sole voting and dispositive powers with
respect to such shares of Class A common Stock held by
it. The mailing address of the Fund is 140 E. 45th
Street, 43rd Floor, New York, NY 10017.
(6) According to a Schedule 13G, dated January 17, 1998,
filed with the Commission by Wellington Management
Company, LLP ("WMC"), an investment adviser registered
under Section 203 of the Investment Advisers Act of
1940, WMC was the beneficial owner of 385,000 shares of
Class A Common Stock as to which WMC held shared
dispositive power. WMC also reported that it had
shared voting power with respect to 125,000 of such
shares of Class A Common Stock held by it. According
to such Schedule 13G, the securities as to which such
Schedule was filed by WMC, in its capacity as
investment advisor, were owned of record by clients of
WMC and no such client was known to have a right to
receive, or the power to direct the receipt of,
dividends from, or the proceeds from the sale of, such
securities with respect to more than 5% of the Class A
Common Stock. The mailing address of WMC is 75 State
Street, Boston, Massachusetts 02109.
(7) According to a Schedule 13G, dated February 5, 1997,
filed with the Commission by Dimensional Fund Advisors
Inc.("DFA"), an investment adviser registered under
Section 203 of the Investment Advisers Act of 1940, DFA
was the beneficial owner of 383,550 shares of Class A
Common Stock as to which DFA held sole dispositive
power. In addition, persons who are officers of DFA
also serve as officers of DFA Investment Dimensions
Group Inc. (the "DFA Fund") and The DFA Investment
Trust Company (the "DFA Trust"), each an open-end
management investment company registered under the
Investment Company Act of 1940, vote, in their
capacities as officers of the DFA Fund and the DFA
Trust, 50,850 additional shares which are owned by the
DFA Fund and 73,300 shares which are owned by the DFA
Trust . Such shares are included in the aggregate
number of shares reported over which DFA has sole
dispositive power. The mailing address of DFA is 1299
Ocean Avenue, 11th Floor, Santa Monica, CA 90401.
(8) Includes the following shares subject to currently
exercisable options: Mr. Franklin - 73,202 shares; Mr.
Zagorsky - 70,252 shares; Mr. Sniady - 11,250 shares;
all other executive officers as a group -- 0 shares.
(9) Includes 8,150 shares of Class A Common Stock owned by
Mr. Zagorsky and 2,050 shares of Class A Common Stock
owned by Mr. Zagorsky's spouse as to which Mr. Zagorsky
disclaims beneficial ownership.
(10) Includes 6,000 shares of Class A Common Stock owned
jointly by Mr. Mandell and his spouse.
Executive Compensation
The following Summary Compensation Table sets forth the
compensation paid by the Company to its Chief Executive
Officer and the Company's four other most highly compensated
executive officers (the "Named Executive Officers") for
services rendered to the Company in fiscal 1995, 1996 and
1997.
Summary Compensation Table
Annual Compensation
Long Term
Compensat
Fiscal ion All
Year Awards; Other
Ended Salary ($) Bonus Securities Compensation
($) Underlying ($)(1)
Options
Stanley D. 2/28/98 311,482 0 0 2,785
Black, 3/1/97 285,906 0 0 8,577
Chairman of 3/2/96 311,251 0 0 9,338
the Board,
and Chief
Executive
Officer
Richard
Griner, 2/28/98 253,606 0 0 594
President 3/01/97 106,731(2) 0 100,000 -0-
and Chief
Operating
Officer
Karl P.
Sniady,
Executive Vice 2/28/98 135,831 0 0 4,045
President, 3/1/97 131,800 0 0 3,954
Finance and 3/2/96 92,500(3) 0 45,000 0
Administration,
Chief
Financial
Officer
Ronald L. 2/28/98 110,519 0 0 2,858
Franklin, Vice 3/1/97 107,239 0 0 3,085
President, 3/2/96 104,515 0 0 3,135
Finance,
Treasurer
Norman W. 2/28/98 110,519 0 0 1,737
Zagorsky, Vice 3/1/97 107,239 0 0 3,217
President, 3/2/96 104,515 0 0 3,135
Purchasing
___________________________
(1) These amounts represent contributions by the Company to
the Company's 401(k) Plan for the benefit of the named
executive officers.
(2) Mr. Griner's annual salary is $250,000. Mr. Griner was
employed by the Company for only a portion of fiscal
1996. His employment began in September 1996.
(3) Mr. Sniady's annual salary is $130,000. Mr. Sniady was
employed by the Company for only a portion of fiscal
1995.
Mr. Black has not been granted any options to purchase
the Company's securities under the Company's stock option
plans.
Stock Option Plans
No options were granted to any of the Named Executive
Officers in the fiscal year ended February 28, 1998. The
following table sets forth certain information with respect
to the aggregate number and value of options exercised and
exercisable by the Named Executive Officers during such
fiscal year.
AGGREGATED EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUE
Number of
Shares of Common Value of
Stock Underlying Unexercised In
Unexercised the Money
Shares Options at Option at
Name and Acquired Value 5/11/98 5/11/98(1)
Principal on Realized Exercisable/Unex Exercisable/Un
Position Exercise ercisable exercisable
Stanley D.
Black,
Chairman of
the Board and 0 $0 0 $0/$0
Chief
Executive
Officer
Richard
Griner,
President and 0 0 0/100,000 0/168,750
Chief
Operating
Officer
Karl Sniady,
Executive
Vice
President,
Finance and 0 0 11,250/33,750 18,984/56,953
Administration
and Chief
Financial
Officer
Ronald L.
Franklin,
Vice 1,500 7,365 73,202/39,198 234,568/128,247
President,
Finance
Norman W.
Zagorsky,
Vice 8,150 34,413 70,252/39,198 222,112/128,247
President,
Trend-Lines
Merchandising
________________________
(1) Based upon the closing price of the Company's Common
Stock on May 11, 1998 on the Nasdaq National Market of
$6.0625 per share less the respective option exercise
price.
Compensation Committee Interlocks and Insider Participation
As described above, until July 19, 1995, the Board of
Directors had a separate Compensation Committee and Stock
Option Committee. On July 19, 1995, the Compensation
Committee and the Stock Option Committee were combined into
a single Compensation and Stock Option Committee. The
Compensation and Stock Option Committee is responsible for
reviewing existing and proposed employment arrangements and
management compensation standards and practices, and for
making recommendations to the Board of Directors with
respect to all forms of remuneration to any officer or
director of the Company, including determinations with
respect to all matters pertaining to the grant of stock
options under the Company's stock option plans. No member
of the Compensation and Stock Option Committee is eligible
to receive options under the Employee Plan. During fiscal
1997, the Compensation and Stock Option Committee was
composed of Messrs. Black and Winter. Except for Mr. Black,
no member of the Compensation and Stock Option Committee is
a former or current officer or employee of the Company.
Compensation and Stock Option Committee Report
The primary objectives of the Compensation and Stock
Option Committee in developing executive compensation
policies are to attract, motivate and retain superior talent
to enable the Company to achieve its business objectives and
to align the financial interests of its executive officers
with the stockholders of the Company.
The compensation of executive officers consists
primarily of base compensation, the grant of options under
the Employee Plan and participation in benefit plans
generally available to employees. In setting compensation,
the Compensation and Stock Option Committee strives to
maintain base compensation for the Company's executive
officers at levels which the Committee believes are
competitive with the compensation of comparable executive
officers in similarly situated companies, while relying upon
stock options or, in the case of Mr. Black, the Chief
Executive Officer, his stock ownership, to provide
significant performance incentives.
Each of the executive officers, other than Mr. Black,
and all employees are eligible to receive grants of options
under the Employee Plan. The Employee Plan is used to
align a portion of the officer's compensation with the
stockholders' interests and the long term success of the
Company. In determining the number of options to be granted
to each executive officer, the Compensation and Stock Option
Committee reviews recommendations provided by Mr. Black and
makes a subjective determination regarding those
recommendations provided by Mr. Black and makes a subjective
determination regarding those recommendations based upon the
following criteria: (i) the individual performance and
position of responsibility of the executive officer, (ii)
the number of options held by the executive officer, and
(iii) the financial performance of the Company. No
particular weight is given to any of these factors, rather
each executive officer's total compensation package in light
of these factors is reviewed as a whole.
In fiscal 1997, Mr. Black, the Company's Chairman of
the Board and Chief Executive Officer, received a base
salary of $311,482. The Board has not conducted any surveys
of salaries of chief executive officers, but based upon its
experience, believes that this compensation is comparable to
the compensation of chief executive officers of comparable companies.
Compensation and Stock Option Committee
Stanley D. Black
Irwin W. Winter
Performance Graph
The following graph compares the cumulative total
shareholder return on the Company's Class A Common Stock
with the cumulative total return on the Nasdaq Stock Market
Index (US Companies) and a self-determined peer group index,
from June 23, 1994 through February 28, 1998, the last
trading day of fiscal 1997. The cumulative total
shareholder return is based on $100 invested in Class A
Common Stock of the Company and in the respective indices on
June 23, 1994, including reinvestment of dividends, stock
splits and other distributions. The stock price performance
shown in the Performance Graph is not necessarily indicative
of future stock price performance.
Performance graph and legend omitted.
Table omitted
June 23, 1994 February 28, 1998
Trend-Lines, Inc. 100.000 64.3
Peer Group 100.000 117.3
NSM (US Companies) 100.000 190.0
________________________
* The Peer Group Index is comprised of the following
retail companies: BMC West Corp. (BMCW), Brookstone,
nc. (BKST), CML Group, Inc. (CML), Eagle Hardware and
Garden, Inc. (EAGL), Hechinger Co., Class A and B
(HECH), Home Depot, Inc. (HD), Lowes Companies, Inc.
(LOW), Michaels Stores, Inc. (MIKE), Spiegel, Inc.,
Class A (SPGLA A), and Williams Sonoma, Inc. (WSGC).
Each of these companies is publicly traded. The
returns of each company have been weighted according to
their respective stock market capitalization for
purposes of arriving at a peer group average.
Certain Relationships and Related Transactions
Stanley D. Black, President and Chief Executive Officer
of the Company, through a certain trust (the "Trust") of
which he is a trustee and beneficiary, leases to the Company
approximately 51,000 square feet of office and warehouse
space in Chelsea, Massachusetts. The facility served as the
former headquarters and central warehouse facility for the
Company before it moved to its current headquarters in
Revere, Massachusetts. The lease, as amended, expires in
2005 and provides for annual base rent in the approximate
amount of approximately $296,000, payable in advance in
monthly installments of $29,600 (approximately $5.80 per
square foot). Under the lease, the Company must pay to the
Trust, in addition to base rent, an amount equal to any
increase in the interest rate on the Trust's first mortgage
on the property and must pay to the Trust or third parties,
as appropriate, all utilities, insurance, real estate taxes,
maintenance and operating costs incurred in maintaining,
operating, insuring and repairing the leased premises.
Pursuant to the lease, the Company paid the Trust $368,000,
$364,000 and $350,000 in fiscal 1997, 1996 and 1995,
respectively. The lease provides for annual escalation of
the base rent, equal on a percentage basis to the increase
in the Consumer Price Index, but in no event more than 5%
per year.
Proposal No. 2
AMENDMENT TO THE 1993 EMPLOYEE STOCK OPTION PLAN
Subject to approval of the Stockholders, the Board of
Directors has approved an amendment to the Company's 1993
Amended and Restated Employee Stock Option Plan (as
previously amended and now in effect, the "1993 Employee
Stock Option Plan") increasing from 1,525,000 to 2,275,000
the total number of shares of the Company's Class A Common
Stock reserved for issuance pursuant to options granted
under the 1993 Stock Option Plan.
Under the 1993 Employee Stock Option Plan, a total of
1,525,000 shares of Class A Common Stock presently are
reserved for issuance upon the exercise of options granted
under the Plan. As of May 29, 1998, a total of 1,202,941
stock options had been granted under the 1993 Employee Stock
Option Plan to employees of the Company, exercisable over
varying periods of time and covering an aggregate of
1,202,941 shares of Class A Common Stock. The exercise price
on all outstanding options is the fair market value of the
Class A Common Stock at the time of grant of each option.
Starting in 1993, the Company began utilizing grants of
stock options as long-term incentives for executive officers
and other employees in addition to cash compensation. The
Board of Directors is of the opinion that the 1993 Employee
Stock Option Plan has helped the Company compete for,
motivate and retain high caliber executives and other key
employees, particularly in a time when the growth of the
Company has absorbed much of its available cash, and that it
is in the best interests of the Company to amend the 1993
Employee Stock Option Plan by increasing from 1,525,000 to
2,275,000 the total number of shares of Class A Common Stock
reserved for issuance pursuant to options granted under the
Plan.
The amendment will permit the continuation of option
grants as the Company and its personnel needs expand,
thereby providing long-term incentives to attract, motivate
and retain the executive officers and other key employees
vital to the Company's future success.
The material terms of the 1993 Employee Stock Option
Plan are described elsewhere in this Proxy Statement-
Prospectus, under "Proposal No. 1 Electing Directors --
Stock Option Plans." The full text of the proposed
amendment is set forth as Appendix I to this Proxy
Statement.
As options expire unexercised, the underlying shares
again become available for the grant of new options. Options
on a total of 1,202,941 shares of Class A Common Stock,
granted at option prices ranging between $1.84 to $7.0625
per share, will expire at various dates up to April 19,
2005.
The closing price of the Class A Common Stock of the
Company on May 11, 1998 on the Nasdaq National Market was
$6.0625.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
AMENDMENT TO THE COMPANY'S 1993 EMPLOYEE STOCK OPTION PLAN
INCREASING FROM 1,525,000 TO 2,275,000 THE TOTAL NUMBER OF
SHARES OF CLASS A COMMON STOCK RESERVED FOR ISSUANCE UPON
EXERCISE OF OPTIONS GRANTED UNDER THE PLAN, WHICH IS
DESIGNATED AS PROPOSAL NO. 2 ON THE ENCLOSED PROXY.
OTHER MATTERS
Voting Procedures
The votes of stockholders present in person or
represented by proxy at the Meeting will be tabulated by an
inspector of elections appointed by the Company. The seven
nominees for directors of the Company who receive the
greatest number of votes cast by stockholders present in
person or represented by proxy at the Meeting and entitled
to vote thereon will be elected directors of the Company.
The affirmative vote by the holders of the combined voting
power of the outstanding shares of Class A Common Stock and
Class B Common Stock (voting together as a single class,
with the holders of Class A Common Stock having one vote per
share and the holders of Class B Common Stock ten votes per
share) will have no effect on the outcome of the vote for
the election of directors. Abstentions and broker non-votes
will be counted as present in determining whether the quorum
requirement is satisfied, and will have the same effect as a
vote against Proposal No. 2.
Independent Auditors
Arthur Andersen LLP audited the Company's consolidated
financial statements for the fiscal year ended February 28,
1998. Such firm has served continuously as the Company's
independent auditors since 1988. A representative of Arthur
Andersen LLP will be at the Meeting and will be available to
respond to appropriate questions.
Reporting Under Section 16(a) of the Securities Exchange Act
of 1934
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's executive officers and directors, and
persons who own more than 10% of the Company's Class A
Common Stock, to file reports of ownership and changes in
ownership on Forms 3, 4 and 5 with the Securities and
Exchange Commission and the Nasdaq Stock Market. Executive
officers, directors and greater than 10% stockholders are
required to furnish the Company with copies of all Forms 3,
4 and 5 they file.
Based solely on the Company's review of the copies of
such Forms it has received and written representations from
certain reporting persons that they were not required to
file Forms 5 for specified fiscal years, the Company
believes that all of its officers, directors and greater
than 10% stockholders complied with all Section 16(a) filing
requirements applicable to them during the Company's fiscal
year ended February 28, 1998.
Other Proposed Action
The Board of Directors knows of no matters which may
come before the Meeting other than the election of directors
and the proposed amendment to the 1993 Employee Stock Option
Plan set forth in Proposal No. 2 above. However, if any
other matters should properly be presented to the Meeting,
the persons named as proxies shall have discretionary
authority to vote the shares represented by the accompanying
proxy in accordance with their own judgment.
Stockholder Proposals
Proposals which stockholders intend to present at the
Company's 1999 Annual Meeting of Stockholders and wish to
have included in the Company's proxy materials must be
received by the Company no later than February 9, 1999.
Incorporation by Reference
To the extent that this Proxy Statement has been or
will be specifically incorporated by reference into any
filing by the Company under the Securities Act of 1933, as
amended or the Securities Exchange Act of 1934, as amended,
the sections of the Proxy Statement entitled "Compensation
Committee Report" and "Performance Graph" shall not be
deemed to be so incorporated, unless specifically otherwise
provided in any such filing.
Annual Report on Form 10-K
Copies of the Company's Annual Report on Form 10-K for
the fiscal year ended February 28, 1998 as filed with the
Securities and Exchange Commission are available to
stockholders without charge upon request addressed to
Stanley D. Black, Chairman, Trend-Lines, Inc., at 135
American Legion Highway, Revere, Massachusetts 02151.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
THEREFORE, STOCKHOLDERS ARE URGED TO FILL IN, SIGN AND
RETURN THE ACCOMPANYING FORM OF PROXY IN THE ENCLOSED
ENVELOPE.
APPENDIX 1
AMENDMENT NO. 2
TO
TREND-LINES, INC. 1993 AMENDED AND RESTATED
EMPLOYEE STOCK OPTION PLAN
Trend-Lines, Inc., a Massachusetts corporation (the
"Corporation"), hereby adopts the following Amendment
effective as of April 29, 1998 to the Trend-Lines, Inc. 1993
Amended and Restated Employee Stock Option Plan, as amended
(the "1993 Plan"):
Section 3 of the 1993 Plan is hereby amended by
deleting the first sentence thereof and substituting the
following new first sentence:
"The aggregate number of shares of the Corporation's
Stock that may be
issued and sold under the Plan shall be 2,275,000."
TREND-LINES, INC.
By: /s/ Stanley D. Black
________________________________
Stanley D. Black, Chairman and Chief
Executive Officer
TREND-LINES, INC.
Dear Stockholder:
Please take note of the important information enclosed with
this Proxy Card. There are a number of important matters to
be considered by our stockholders that require your
immediate attention and approval. These are discussed in
detail in the attached proxy material.
Your vote counts, and you are strongly encouraged to
exercise your right to vote your shares.
Please mark the boxes on the proxy card to indicate how your
shares shall be voted. Then sign the card, detach it and
return your proxy in the enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of
Stockholders to be held on July 13, 1998.
Thank you in advance for your prompt consideration of these
matters.
Sincerely,
Trend-Lines, Inc.
Detach Here
X Please mark votes as in
This example.
1. Election of Directors 2. Proposed For Against Abstain
Nominees: Stanley D. amendment to the
Black, Richard Griner, Company's 1993
Karl P. Sniady, Ronald L. Employee Stock
Franklin, Option Plan, to
Richard Mandell and Irwin increase from
W. Winter 1,525,000 to
2,275,000 the
For Withheld total number of
shares of the
Company's Class A
Common Stock
reserved for
issuance
thereunder.
For all nominees except
as noted above 3. In their discretion, the proxies are
authorized to vote upon such other
business as may properly come before the
meeting
MARK HERE FOR ADDRESS CHANGE AND NOTE ON
REVERSE
MARK HERE IF YOU PLAN TO ATTEND THE
MEETING
MARK HERE FOR COMMENTS AND NOTE ON
REVERSE
Please be sure to sign and date this
Proxy
Signature: Date: Signature: Date:
DETACH HERE
PROXY
TREND-LINES, INC.
1998 ANNUAL MEETING OF STOCKHOLDERS JULY 13, 1998
The undersigned hereby appoints Stanley D. Black and
Ronald L. Franklin, and each of them, acting singly, with
full power of substitution, proxies to represent the
undersigned at the 1998 Annual Meeting of Stockholders of
Trend-Lines, Inc. to be held July 13, 1998 at 11:00 a.m. at
the offices of the Company, 135 American Legion Highway,
Revere, Massachusetts 02151, and at any adjournments
thereof, to vote in the name and place of the undersigned,
with all powers which the undersigned would possess if
personally present, all of the shares of TREND-LINES, INC.
standing in the name of the undersigned upon the matters set
forth in the Notice of Annual Meeting and Proxy Statement
for the meeting in accordance with the instructions on the
reverse side and upon such other business as may properly
come before the meeting.
THE BOARD RECOMMENDS AN AFFIRMATIVE VOTE ON ALL
PROPOSALS SPECIFIED, SHARES WILL BE VOTED AS SPECIFIED. IF
NO SPECIFICATION IS MADE, THE SHARES REPRESENTED WILL BE
VOTED FOR THE ELECTION OF DIRECTORS AND FOR THE ADOPTION OF
THE PROPOSED AMENDMENT TO THE 1993 EMPLOYEE STOCK OPTION
PLAN, ALL AS SET FORTH IN THE PROXY STATEMENT.
PLEASE DATE AND SIGN THIS PROXY IN THE SPACE PROVIDED
AND RETURN IT IN THE ENCLOSED ENVELOPE, WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING IN PERSON.
PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE.
Please sign this proxy exactly as your name appears on
the books of the Company. Joint owners should each sign
personally. Trustees and other fiduciaries should indicate
the capacity in which they sign, and where more than one
name appears, a majority must sign. If a corporation, this
signature should be that of any authorized officer who
should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
__________________________ _________________________
__________________________ _________________________
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