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))
The Barbers, Hairstyling for Men & Women, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions 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:
THE BARBERS, HAIRSTYLING FOR MEN & WOMEN, INC.
300 Industrial Boulevard, NE
Minneapolis, Minnesota 55413
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 28, 1997
------------------------
TO THE SHAREHOLDERS OF THE BARBERS, HAIRSTYLING FOR MEN & WOMEN, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of
The Barbers, Hairstyling for Men & Women, Inc., a Minnesota corporation, will be
held on Tuesday, January 28, 1997 at 3:30 p.m., at the Crowne Plaza Hotel, 618
Second Avenue South, Minneapolis, MN for the following purposes:
1. To elect directors to serve for the ensuing year or until their
resignation or removal.
2. To ratify the appointment of Ernst & Young LLP as independent auditors
for the fiscal year 1997.
3. To transact such other business as may properly come before the Annual
Meeting or any adjournments or postponements thereof.
Only Shareholders of record at the close of business on December 9,
1996 are entitled to notice of and to vote at the Annual Meeting and any
adjournments or postponements thereof.
EACH OF YOU IS INVITED AND URGED TO ATTEND THE ANNUAL MEETING IN
PERSON IF POSSIBLE. WHETHER OR NOT YOU ARE ABLE TO ATTEND IN PERSON, YOU ARE
REQUESTED TO DATE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE ENVELOPE
ENCLOSED FOR YOUR CONVENIENCE.
By Order of the Board of Directors
Patricia D. Kessler
Corporate Secretary
December 30, 1996
THE BARBERS, HAIRSTYLING FOR MEN & WOMEN, INC.
300 Industrial Boulevard, NE
Minneapolis, Minnesota 55413
PROXY STATEMENT
For Annual Meeting of Shareholders
to be held January 28, 1997
SOLICITATION OF PROXIES
GENERAL
The enclosed proxy is solicited by and on behalf of the Board of
Directors of The Barbers, Hairstyling for Men & Women, Inc. (the "Company") for
use at the Annual Meeting of Shareholders on Tuesday, January 28, 1997 at 3:30
p.m., and any adjournment or postponement thereof. The approximate date on which
this Proxy Statement and form of proxy will first be sent or given to
Shareholders is December 30, 1996.
RECORD DATE
Only Shareholders of record at the close of business on December 9,
1996, are entitled to notice of and to vote at the Annual Meeting or any
adjournments or postponements thereof. Each share so held entitles the holder to
one vote upon each matter to be voted upon. On December 9, 1996, the Company had
outstanding 2,571,454 shares of common stock. A quorum, consisting of a majority
of the outstanding shares of the common stock entitled to vote at the Annual
Meeting, must be present in person or represented by proxy before action may be
taken at the Annual Meeting.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the
person giving the proxy at any time before it is voted. Proxies may be revoked
by (a) giving written notice of such revocation to the secretary of the Company
at the Company's principal executive office located at 300 Industrial Boulevard
NE, Minneapolis, MN 55413, (b) giving another written proxy bearing a later
date, or (c) attending the Annual Meeting and voting in person (although
attendance at the Annual Meeting will not in and of itself constitute a
revocation of a proxy).
VOTING AND SOLICITATION
All shares represented by proxies which have been properly executed and
filed with the secretary of the Company prior to or at the meeting will be voted
at the meeting. Where a specification is made by the Shareholder as provided in
the form of proxy, the shares will be voted in accordance with such
specification. If no specification is made, the shares will be voted (i) FOR the
election of all of the nominees for director named in this Proxy Statement and
(ii) FOR the ratification of the appointment of Ernst & Young LLP as independent
auditors for the fiscal year 1997.
Votes cast by proxy or in person at the Annual Meeting will be
tabulated by the Inspectors of Election appointed for the meeting and will
determine if a quorum is present. If an executed proxy card is returned and the
Shareholder has abstained from voting on any matter, the shares represented by
such proxy will be considered present at the meeting for purposes of determining
a quorum and for purposes of calculating the vote, but will not be considered to
have been voted in favor of such matter. If an executed proxy is returned by a
broker holding shares in street name which indicates that the broker does not
have discretionary authority as to certain shares to vote on one or more
matters, such shares will be considered present at the meeting for purposes of
determining a quorum, but will not be considered to be represented at the
meeting for purposes of calculating the vote with respect to such matter.
The expense of the solicitation of proxies for this Annual Meeting,
including the cost of mailing, has been or will be borne by the Company. The
Company has retained Norwest Stock Transfer and Automatic Data Processing, Inc.
to provide proxy solicitation services in connection with the meeting at an
estimated total cost of $3,000. Arrangements will be made with brokerage houses
and other custodian nominees and fiduciaries to send proxies and proxy materials
to their principals and the Company will reimburse them for their expense in so
doing. In addition to solicitation by mail, proxies may be solicited by
telephone, telegraph or personally by certain of the Company's directors,
officers and regular employees, without additional compensation.
PROPOSAL ONE
ELECTION OF DIRECTORS
GENERAL
The property, affairs and business of the Company are managed under
the direction of the Board of Directors. A board of seven (7) directors is to be
elected at the meeting. Unless otherwise instructed, the proxy holders will vote
the proxies received by them for Management's seven (7) nominees named below,
all of whom are presently directors of the Company. The term of office for each
person elected as a director will continue until the next Annual Meeting of the
Shareholders, until such person is removed or until such person resigns. All of
the nominees named below are presently directors of the Company and have served
continuously since the date indicated. All nominees have indicated a willingness
to serve if elected.
All shares represented by proxies which have been properly executed
and returned will be voted for the election of the nominees named below, unless
other instructions are indicated thereon. In the event any one or more of such
nominees should for any reason be unable to serve as a director, it is intended
that the enclosed proxy will be voted for such person or persons as may be
selected in accordance with the best judgment of the proxy holders named
therein.
NOMINEES
The names of the nominees, all of whom are currently serving as directors
of the Company, and certain information about them are set forth below:
NAME POSITION WITH COMPANY AGE DIRECTOR SINCE
---- --------------------- --- --------------
Florence F. Francis Chairman of the Board 60 1989
Frederick A. Huggins, Jr. President, Chief Executive 61 1988
Officer and Director
Marcia J. Bystrom Director 52 1995
David E. Emerson Director 61 1988
Richard H. King Director 71 1986
James L. Reissner Director 56 1991
Susan F. Goldstein Director 38 1995
VOTE REQUIRED
If a quorum is present and voting, directors are elected by a majority
of the votes cast for the election of directors at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES NAMED
ABOVE.
INFORMATION CONCERNING
DIRECTORS AND NOMINEES
DIRECTORS AND NOMINEES
Certain information concerning the directors and nominees of the Company is set
forth below.
Ms. Francis has been Chairman of the Board of Directors of the Company since
April 1994, and previously served as Vice-Chairman of the Board of Directors
from August 1993. She has been a director of the Company since January 1989. She
is a major shareholder of the Company and has directed public relations and
franchisee relations for the Company since February 1988. In addition, Ms.
Francis has also been involved in public relations and franchisee relations for
the Company since the inception of the Company's "The Barbers(R)" franchising
program in 1970.
Mr. Huggins joined the Company as a member of its Board of Directors in January
1988 and became President and Chief Executive Officer in April 1990. Mr. Huggins
has over twenty-five years of franchising experience. He was the Vice President
of the Fast Food and Restaurant Division of International Multifoods Corporation
from June 1982 to March 1990, and was the President of Mister Donut of America,
Inc., a subsidiary of International Multifoods Corporation, from January 1985 to
March 1990. Prior to that, Mr. Huggins worked in various franchise-related
capacities for Dunkin' Donuts, Inc., Dutch Pantry Restaurants and Pizza Hut,
Inc.
Ms. Bystrom has been a director of the Company since January 1995. Ms. Bystrom
has been an Investment Executive of Piper Jaffray, Inc. since 1985. From 1982 to
1985, she was Owner and Manufacturer's Representative of Bystrom Sales Company.
She sits on the Board of Directors of Minnesota Cooperation Office for Job
Creation, Inc., Noah's Ark Senior Housing, Inc., Minnesota Special Olympics,
Hill Library, and Urban Ventures Leadership Foundation.
Mr. Emerson became a director of the Company in January 1988. He is currently
Director, Graduate Program in Organizational Leadership and has been a Professor
of Accounting and Finance at the College of St. Catherine, St. Paul, Minnesota,
since 1980. Mr. Emerson is a certified public accountant.
Mr. King has been a director of the Company since April 1986 and a self-employed
business and financial consultant since January 1988. He was the Vice President
of Corporate Development for the Company from April 1986 until December 1987.
Prior to joining the Company, he was associated with International Multifoods
Corporation, Minneapolis, Minnesota, initially as its Controller for
approximately two years, and then as its Vice President-Finance for
approximately 15 years. Mr. King also acts as a trustee to the Company's 401(k)
Plan.
Mr. Reissner has been a director of the Company since December 1991. He is
currently President and Chief Operating Officer of Activar, Inc. Mr. Reissner
was the Chief Financial Officer of Activar, Inc. from January 1993 through June
1996. He has also been a director of Toro Credit Company since March 1991; a
director of Vermillion State Bank since January 1993; and a director of Intek,
Inc. since January 1995. From January 1991 to December 1992 he was a
self-employed banking and financial consultant. He was the Managing Director of
the Minnesota Region for First Bank Systems from 1985 until December 1990. From
1980 to 1985, he was the Managing Director of the Metro Region for First Bank
Systems.
Ms. Goldstein has been a director of the Company since December 1995. Ms.
Goldstein is President of the Joe Francis Haircare Scholarship Foundation. Ms
Goldstein was employed by CC Pittsburgh, Inc., which operated Cost Cutters
franchises, as Operations Manager from March 1995 to March 1996. From 1985 to
1995, Ms. Goldstein was a homemaker. From 1983 to 1985, she was a Sales
Representative for Control Data Business Corporation in Chicago, Illinois. From
1980 to 1983, she was a Systems Analyst for the Commodity Marketing Division of
Cargill, Inc.
FAMILY RELATIONSHIPS.
Florence F. Francis, Chairman of the Board of Directors and major
shareholder, is the widow of Joseph Francis, Sr., who was the founder, former
Chairman of the Board of Directors and a major Shareholder in the Company.
Susan F. Goldstein is the daughter of Florence F. Francis, the Chairman
of the Board and major shareholder.
DIRECTOR COMPENSATION
For the fiscal year ended September 26, 1996, each non-employee
director was paid $625 per month and 75 shares of common stock for each Board of
Directors meeting attended. In addition, for the fiscal year ended September 26,
1996, each non-employee director received an automatic, nondiscretionary award
of options to purchase 3,000 shares of common stock pursuant to the 1990 Stock
Option Plan for Directors. No additional compensation is paid to directors for
attendance at committee meetings which are held on the same day as a meeting of
the Board of Directors; however, each director is paid $200 per committee
meeting attended that is held on a day other than the day of a meeting of the
Board of Directors.
Beginning January 1, 1997, each non-employee director will be paid $750
per month and 75 shares of common stock for each Board of Directors meeting
attended; provided that if the Board of Directors holds more than nine meetings
a year, each director will be paid $500 per additional meeting attended. No
additional compensation is paid to directors for attendance at committee
meetings which are held on the same day as a meeting of the Board of Directors;
however, each director will be paid $200 per committee meeting attended that is
held on a day other than the day of a meeting of the Board of Directors. In
addition, each non-employee director will receive an annual, nondiscretionary
award of options to purchase 2,000 shares of common stock pursuant to the 1990
Stock Option Plan for Directors.
BOARD ACTIONS AND COMMITTEES
During the fiscal year ended September 26, 1996, the Company's Board of
Directors met or took action by written consent ten times. All of the directors
attended at least 75% of the aggregate number of meetings of the Board of
Directors and the committees on which he or she served.
The Board of Directors has an Audit Committee, which consisted of the
following individuals for the fiscal year ended September 26, 1996: David E.
Emerson and Richard H. King. The Audit Committee, which met two times during the
fiscal year ended September 26, 1996, reviews and reports to the Board with
respect to various auditing and accounting matters, including the engagement of
independent auditors, the scope of audit procedures, the scope, frequency and
results of internal audits, and the adequacy of internal accounting controls.
The Board of Directors has a Compensation Committee, which consisted of
the following individuals for the fiscal year ended September 26, 1996: Marcia
J. Bystrom, David E. Emerson, Richard H. King, and James L. Reissner. The
Compensation Committee, which met one time in fiscal year 1996, awards stock
options, reviews salary levels, bonuses and other matters and makes
recommendations to the Board of Directors in connection therewith.
The entire Board of Directors acts as a nominating committee.
PROPOSAL TWO
RATIFICATION AND APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed the firm of Ernst & Young LLP as
independent public auditors to audit the books, records and accounts of the
Company for the fiscal year ending September 25, 1997.
Representatives of Ernst & Young LLP will be present at the Annual
Meeting, will have an opportunity to make a statement if they desire to do so
and will be available to respond to appropriate questions by Shareholders.
VOTE REQUIRED
The affirmative vote of not less than a majority of the common stock
represented either in person or by proxy and entitled to vote at the meeting
will be required to ratify the appointment of the independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT
OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS.
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding
compensation for the fiscal year ended September 26, 1996 and the two prior
fiscal years earned by or paid to the Company's Chief Executive Officer and the
four most highly compensated executive officers, other than the Chief Executive
Officer, who received more than $100,000 in fiscal 1996.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
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Annual Compensation Long-Term
Compensation Awards
---------------------------------------- --------------------------
Other Annual Deferred Options/ All Other
Name and Principal Fiscal Compensation Compensation SARs Compensation
Position Year Salary($) Bonus($)(2) ($)(3) Award(s)($) (#)(6) ($)(7)
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<S> <C> <C> <C> <C> <C> <C> <C>
Florence F. Francis 1996 $194,754 $ 85,930 $ 16,417 $ 21,043 15,000 $ 3,511
Chairman of the 1995 $190,000 $ 71,383 $ 17,690 $ 20,382 15,000 $ 659
Board of Directors (1)(4) 1994 $ 85,000 $ 57,463 $ 4,503 NA 1,500 $197,542
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Frederick A. Huggins, Jr 1996 $194,754 $ 85,930 $ 30,466 $ 26,464 15,000 $ 3,553
President and Chief 1995 $190,000 $ 71,383 $ 21,093 $ 25,938 15,000 $ 3,562
Executive Officer (4) 1994 $146,298 $ 57,463 $ 8,045 $ 13,260 15,000 $ 3,229
- ------------------------------------------------------------------------------------------------------------------------------
John A. Fox 1996 $213,421 $ 33,291 $ 1,068 $ 53,050 3,750 $ 1,448
Vice President of 1995 $181,300 $ 27,325 $ 1,617 NA 3,750 $ 1,373
Development (5)(8) 1994 $118,685 $ 14,321 $ 2,705 NA 3,750 $ 1,414
- ------------------------------------------------------------------------------------------------------------------------------
James W. George 1996 $ 83,207 $ 36,721 $ 2,820 $ -- 3,750 $ 2,175
Vice President of 1995 $ 79,758 $ 30,078 $ 2,915 NA 3,750 $ 1,959
Franchise Services (5) 1994 $ 76,256 $ 15,543 $ 2,298 NA 3,750 $ 1,907
- ------------------------------------------------------------------------------------------------------------------------------
J. Brent Hanson 1996 $ 79,096 $ 34,894 $ 3,325 $ -- 3,750 $ 2,128
Vice President and Chief 1995 $ 76,292 $ 28,656 $ 135 NA 3,750 $ 1,828
Financial Officer (5) 1994 $ 73,356 $ 14,960 $ 126 NA 3,750 $ 1,794
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Included in the 1994 "All Other Compensation" is $197,542 paid to Ms.
Francis under the terms of the Company's employment agreement with her
deceased husband, Joseph Francis, founder, former Chairman of the Board
of Directors and major shareholder of the Company.
(2) All amounts paid pursuant to the Company's Incentive Compensation Plan,
See "Employment Agreements - INCENTIVE COMPENSATION PLAN".
(3) This principally represents amounts paid for life insurance premiums,
company automobiles, tax preparation and medical cost reimbursements.
(4) Deferred Compensation represents the Company's contribution to a
deferred compensation plan pursuant to the employment agreement with
the employee. Under the terms of the agreements, the employee or his
beneficiary is only entitled to receive the Company's plan
contributions when his or her employment is terminated or upon his or
her death.
(5) Deferred Compensation represents voluntary elective reductions in base
pay, commissions, and/or bonus deferred under The Barbers, Hairstyling
for Men & Women, Inc. Deferred Compensation Plan.
(6) Options or warrants to purchase shares of common stock of the Company
becoming exercisable during the fiscal year. See also "Employment
Agreements". All options and warrants have been adjusted to reflect the
3-for-2 stock split that was issued October 31, 1996.
(7) This amount represents the Company's contribution to its 401(k) Plan
for this individual.
(8) Salary amounts include commissions earned on the sale and opening of
new franchise locations.
OPTION/SAR GRANTS IN LAST FISCAL YEAR (INDIVIDUAL GRANTS)
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Percent of Total
Options/SARs
Options/SARs Granted to Exercise or
Granted Employees in Base Price Expiration
Name (#)(1) Fiscal Year ($/Sh)(2) Date
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Marcia J. Bystrom 3,000 16.00% $ 5.250 1/31/06
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David E. Emerson 3,000 16.00% $ 5.250 1/31/06
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Susan F. Goldstein 3,000 16.00% $ 5.250 1/31/06
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Richard H. King 3,000 16.00% $ 5.250 1/31/06
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James L. Reissner 3,000 16.00% $ 5.250 1/31/06
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John A. Fox 15,000 80.00% $ 5.250 1/31/06
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(1) All options were granted pursuant to the Company's 1990 Stock Option
Plan for Key Employees or the 1990 Stock Option Plan For Directors. All
options granted have been adjusted to reflect the 3-for-2 stock split
which became effective October 31, 1996.
(2) Market Price on date of grant, as adjusted for the 3-for-2 stock split.
EMPLOYMENT AGREEMENTS
EMPLOYMENT AGREEMENT WITH FLORENCE F. FRANCIS. On October 13, 1994, Ms.
Francis entered into an employment agreement with the Company. Under the
employment agreement, Ms. Francis will receive a base salary of $190,000 per
year, which will be increased annually on October 1 to reflect the increase in
the consumer price index, and participation in the Incentive Compensation Plan,
described below.
In addition, Ms. Francis is eligible for the following fringe benefits:
participation in the Company's group health plan; the use of a company car; a
yearly tax preparation fee of $2,500; participation in a stock option plan; life
insurance coverage in the amount of $1,500,000; and participation in a deferred
compensation plan, which is equal to 10% of Ms. Francis' base salary each year.
See also "Certain Relationships and Related Transactions".
In connection with Ms. Francis' employment agreement, she received
warrants to purchase 75,000 shares of common stock, exercisable at a price of
$2.67 per share, which vest over five years beginning on October 1, 1994. Such
warrants expire one year after termination of Ms. Francis' employment with the
Company.
EMPLOYMENT AGREEMENT WITH FREDERICK A. HUGGINS, JR. Mr. Huggins is
currently the President, Chief Executive Officer and a director of the Company.
For the fiscal year ended on September 26, 1996, Mr. Huggins employment
relationship with the Company was governed by an employment agreement, the term
of which began on October 1, 1994 and continues through September 30, 2000.
Under the terms of this employment agreement, Mr. Huggins will receive a base
salary of $190,000 per year, which will be increased annually on October 1 to
reflect the increase in the consumer price index, and participation in the
Incentive Compensation Plan, described below.
In addition, Mr. Huggins is eligible for the following fringe benefits:
participation in the Company's group health plan; the use of an automobile; a
yearly tax preparation fee of up to $2,500; participation in a stock option
plan; life insurance coverage in the amount of $1,000,000; and participation in
a deferred compensation plan, which is equal to 10% of Mr. Huggins' base salary
each year.
The Agreement provides that if the Company terminates Mr. Huggins'
employment, Mr. Huggins will receive his base salary, health insurance, company
car, and tax preparation fees for a period of 18 months after the date of
termination. If Mr. Huggins voluntarily terminates his employment with the
Company, he will receive only his base salary up to the date of termination;
however, if there is a change of control in the Company, and the Company
initiates Mr. Huggins' termination within one year from the date of the change
of control, then the Company will pay Mr. Huggins' base salary, health
insurance, company car, and tax preparation fees for a period of 30 months from
the date of termination. The Agreement also provides that if after a change in
control, Mr. Huggins resigns within one year from the date of the change in
control, then the Company will pay Mr. Huggins' base salary, health insurance,
company car, and tax preparation fees for a period of 18 months after the
termination. All benefits not mentioned above will cease on the date of
termination.
In connection with Mr. Huggins' employment agreement, he received
warrants to purchase 75,000 shares of common stock, exercisable at a price of
$2.67 per share, which vest over five years beginning on October 1, 1994. Mr.
Huggins also has warrants to purchase 75,000 shares of common stock exercisable
at $1.58 per share. These warrants were awarded in April 1990 and are fully
vested. All warrants expire one year after termination of Mr.
Huggins' employment with the Company.
SALARY CONTINUATION AGREEMENT WITH PATRICIA D. KESSLER. On February 9,
1988, the Company entered into a salary continuation agreement with Patricia D.
Kessler, who is currently the Corporate Secretary and Franchise Compliance
Officer. In addition to her yearly salary, the agreement provides that if Ms.
Kessler remains in the continuous employ of the Company until she reaches age
65, the Company will pay Ms. Kessler, or her named beneficiary, retirement
benefits of $250,000 in 120 equal monthly installments over a ten year period.
If Ms. Kessler dies prior to attaining age 65, the agreement provides a death
benefit to her named beneficiary of $250,000 in 120 equal monthly payments.
SPECIAL TERMINATION ALLOWANCE. The Company has established a special
termination allowance for key employees which becomes effective in the event of
a "change of control" of the Company, as defined under the terms of the special
termination allowance. The agreement calls for a continuation of base salary and
benefits equal to one month's salary per year of service to a maximum of twelve
months. The agreement also prorates the annual incentive bonus to the date of
termination and guarantees franchise sales commissions for all sales made prior
to the termination date.
INCENTIVE COMPENSATION PLAN. The Incentive Compensation Plan provides
that once the Company reaches a certain pre-tax profit target, a portion of
pre-tax profits will be allocated to the Incentive Compensation Plan. Amounts
accrued for this Plan will be allocated to executive participants in proportion
with their base salary levels and a portion will be allocated to the general
employees' profit sharing plan, which will be allocated by a point system
reflecting base salary and years of service.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the common stock of the Company as of September 26, 1996
by each person who is known by the Company to beneficially own more than 5% of
the outstanding common stock, each of the Company's executive officers named,
each director and each nominee, and all executive officers, directors and
nominees of the Company as a group. Unless otherwise noted, each person or group
identified has sole voting and investment power with respect to the shares of
common stock shown.
- --------------------------------------------------------------------------------
Amount and Nature of Percent
Name and Address of Beneficial Owner* Beneficial Owner of Class(1)
- --------------------------------------------------------------------------------
Florence F. Francis (2) 1,523,998 shares(3)(4) 53.26%
- --------------------------------------------------------------------------------
Frederick A. Huggins, Jr 127,665 shares(3)(4) 4.46%
- --------------------------------------------------------------------------------
John A. Fox 16,965 shares(3)(4) **
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James W. George 22,215 shares(3)(4) **
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J. Brent Hanson 24,007 shares(3)(4) **
- --------------------------------------------------------------------------------
Marcia J. Bystrom 6,525 shares(4) **
- --------------------------------------------------------------------------------
David E. Emerson 22,207 shares(4) **
- --------------------------------------------------------------------------------
Susan F. Goldstein 42,000 shares(4) 1.47%
- --------------------------------------------------------------------------------
Richard H. King 25,125 shares(4) **
- --------------------------------------------------------------------------------
James L. Reissner 11,175 shares(4) **
- --------------------------------------------------------------------------------
All Executive Officers, Directors, and
nominees as a group (12 persons) 1,848,912 shares (3)(4) 64.61%
- --------------------------------------------------------------------------------
* Unless otherwise indicated, the business address of each beneficial
owner is: c/o The Barbers, 300 Industrial Blvd. NE, Minneapolis, MN
55413
** Indicates common stock ownership of less than 1%.
(1) Includes 2,568,274 shares outstanding as of September 26, 1996 and
assumes the exercise of 293,250 warrants and options as listed in
footnote 4.
(2) Includes 210,000 shares held by Charles E. Garrity, as Trustee of the
Florence F. Francis 1995 Irrevocable Annuity Trust under Agreement
dated December 1, 1995. The address of the trust is: c/o Garrity &
Associates, Suite 220, 9977 Valley View Road, Eden Prairie, MN 55344.
The trust was created for the benefit of Ms. Francis, as grantor, and
her children. The trustee has sole power to dispose of the shares held
by the Trust and to vote such shares at the Annual Meeting. Ms. Francis
has the right to receive approximately 25% of the fair market value of
the assets of the Trust annually, which distribution may be made to her
either in cash or shares of common stock.
(3) Excludes shares of common stock held by the 401(k) Plan in which the
individuals are participants.
(4) Includes currently exercisable stock options and warrants as follows:
Florence F. Francis, 51,000 shares; Frederick A. Huggins, Jr., 120,000
shares; John A. Fox, 15,000 shares; James W. George, 18,750 shares; J.
Brent Hanson, 18,750 shares; Marcia J. Bystrom, 6,000 shares; David E.
Emerson, 15,000 shares; Susan Goldstein, 3,000 shares; Richard H. King,
18,000 shares; James L. Reissner, 9,000 shares; all other executive
officers together, 18,750 shares.
INFORMATION REGARDING EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Certain information concerning executive officers of the Company who
are not directors is set forth below.
NAME POSITIONS WITH THE COMPANY AGE SINCE
---- -------------------------- --- -----
Connie Boltinghouse Vice President of National Distribution 53 1996
John A. Fox Vice President of Development 58 1993
James W. George Vice President of Franchise Services 38 1992
J. Brent Hanson Vice President and Chief Financial Officer 42 1989
Patricia D. Kessler Corporate Secretary and Franchise 45 1988
Compliance Officer
Ms. Boltinghouse rejoined the Company to become Vice President of National
Distribution in October 1996. Ms. Boltinghouse was previously employed by the
Company from 1990 to 1993 in the position of Director of Franchise Operations
and Education. From 1993 to 1996, Ms. Boltinghouse was employed by Brookfield
Assemblies of God in the position of Executive Pastor of Ministries. Ms.
Boltinghouse was employed by Mr. Donut of America, a division of International
Multifoods Corporation, from 1984 to 1990 in the position of Director of
Training School and Product Development.
Mr. Fox has been Vice President of Development of the Company since January
1993, and was Vice President of Franchise Sales of the Company from December
1991 to January 1993. He was National Sales Manager for the Cost Cutters
division of the Company from April 1990 to December 1991. Mr. Fox previously
worked as Director of Development for Mister Donut of America from August 1984
to March 1990.
Mr. George has been Vice President of Franchise Services for the Company since
June 1992. He was Vice President of Franchise Services - Cost Cutters from
January 1989 to June 1992. He was Vice President of Marketing - Cost Cutters
from October 1985 to January 1989. He was Regional Marketing Manager for USA
Cafes from June 1984 to September 1985. Mr. George was employed by International
Dairy Queen, Inc. as Regional Marketing Manager from July 1982 to May 1984 and
as a Store Opening Specialist from March 1981 to June 1982.
Mr. Hanson has been Vice President and Chief Financial Officer of the Company
since January 1989. He was Vice President and Chief Financial Officer of
Determan Marketing Corporation from August 1987 until November 1988. Mr. Hanson
was employed by the Haagen-Dazs Company, Inc. from January 1985 until August
1987, first as General Accounting Manager, then as Sales and Distribution
Accounting Manager. He was employed by The Pillsbury Company from January 1976
until December 1984 in various accounting management positions, the most recent
being Warehousing Accounting Manager - US Foods Division.
Ms. Kessler has been associated with the Company since November 1971. She was
the Corporate Secretary of the Company from August 1988 to August 1991. Ms.
Kessler was Assistant to the President from July 1983 to September 1989, has
been Franchise Compliance Officer since February 1988, and was reappointed
Corporate Secretary in December 1992.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
LEASE OF THE COMPANY HEADQUARTERS. The Company leases from its Chairman
of the Board and major shareholder, Florence F. Francis, approximately 65,400
square feet for its corporate headquarters. The amount of rent increases each
year and the Company is required to pay real estate taxes and insurance. The
lease will expire on October 31, 1997. The rental payments for the corporate
headquarters were $385,000 in 1994, $399,000 in 1995, and $426,000 in 1996.
FRANCHISES OWNED BY AN OFFICER AND DIRECTOR. Florence F. Francis owns
49% equity interest in CC Harrisburg, Inc., a Minnesota corporation. CC
Harrisburg, Inc. owns and operates 17 franchised salons.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
Based solely upon a review of Forms 3, 4 and 5, any amendments thereto,
and any written representations from certain reporting persons, the Company
believes that, during the fiscal year 1996, the Company complied with all filing
requirements applicable to directors, officers, and beneficial owners of more
than 10% of any class of equity securities.
PROPOSALS OF SHAREHOLDERS
Any proposal of a Shareholder of the Company intended to be presented
at the Annual Meeting of Shareholders in January 1998, must be received at the
Company's office on or before September 1, 1997 in order to be considered for
inclusion in the Company's Proxy Statement and form of proxy relating to that
meeting.
OTHER MATTERS
At the date of this Proxy Statement, the Board of Directors knows of no
other matters which may come before the Annual Meeting. However, if any other
matters properly come before the meeting, it is the intention of the persons
named in the enclosed proxy form to vote such proxies received by the Company in
accordance with their judgment on such matters.
December 30, 1996 By Order of the Board of Directors
Patricia D. Kessler
Corporate Secretary and
Franchise Compliance Officer
PROXY
THE BARBERS, HAIRSTYLING FOR MEN & WOMEN, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies given by the undersigned for the
Annual Meeting of the Shareholders of The Barbers, Hairstyling for Men & Women,
Inc. to be held on Tuesday, January 28, 1997 at 3:30 p.m., at the Crowne Plaza
Hotel, 618 Second Avenue South, Minneapolis, MN, hereby appoints Florence F.
Francis and Frederick A. Huggins, Jr., and each of them, as proxy or proxies,
with full power of substitution and revocation, to vote for the undersigned and
in the name of the undersigned all shares of common stock of The Barbers,
Hairstyling for Men & Women, Inc. of the undersigned, as if the undersigned were
personally present and voting at said Annual Meeting, and all adjournments or
postponements thereof, upon the following matters:
1. Election of directors to serve for the ensuing year or until their
resignation or removal.
Nominees: Florence F. Francis, Frederick A. Huggins, Jr.,
Marcia J. Bystrom, David E. Emerson, Susan F. Goldstein, Richard H. King
and James L. Reissner.
[ ] VOTE FOR all nominees listed above (except as marked to the contrary
below).
[ ] VOTE WITHHELD as to all nominees listed above.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE OR
NOMINEES, WRITE EACH NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
2. Ratification and appointment of Ernst & Young LLP as independent auditors
for the fiscal year 1997.
[ ] For [ ] Against [ ] Abstain
(CONTINUED, AND TO BE SIGNED, ON REVERSE SIDE)
(CONTINUED FROM OTHER SIDE)
3. In their discretion, the proxies are authorized to transact such other
business as may come before the Annual Meeting or any adjournments or
postponements thereof.
This Proxy, when properly executed, will be voted in the manner specified herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF ALL DIRECTORS AND FOR PROPOSAL 2.
The undersigned hereby acknowledges receipt of the Notice of the Annual Meeting
of Shareholders of The Barbers, Hairstyling For Men & Women, Inc. and the Proxy
Statement furnished therewith dated December 30, 1996.
Please sign your name exactly as it appears
below. In the case of shares owned in joint
tenancy or as tenants in common, all should
sign. Fiduciaries should indicate their
title and authority. If signer is a
corporation, please sign full corporation
name by authorized officer.
Dated:_____________________________, 199___.
____________________________________________
____________________________________________
(Signature)
PLEASE MARK, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
