<PAGE>
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
BABY SUPERSTORE, INC.
(Name of Registrant as Specified in Its Charter)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
<PAGE>
BABY SUPERSTORE, INC.
1201 Woods Chapel Road
Duncan, South Carolina 29334
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 4, 1996
The Annual Meeting of Shareholders of Baby Superstore, Inc. will be
held in the Carolina Ballroom of the Marriott Hotel, One Parkway East,
Greenville, South Carolina on Tuesday, June 4, 1996, at 1:00 p.m., for the
following purposes:
(1) To elect seven members to the Board of Directors;
(2) To ratify the appointment of the Company's independent
auditors; and
(3) To transact such other business as may properly come before
the Annual Meeting or any adjournments thereof.
Only shareholders whose names appeared of record on the books of the
Company at the close of business on April 26, 1996 will be entitled to notice of
and to vote at the Annual Meeting or at any adjournments thereof.
You are cordially invited and urged to attend the Annual Meeting in
person, but if you are unable to do so, please date, sign and promptly return
the enclosed proxy card in the enclosed postage paid envelope. If you attend the
Annual Meeting and desire to revoke your proxy and vote in person, you may do
so. In any event, you remain entitled to revoke your proxy at any time before it
is exercised.
Jack P. Tate
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
April 26, 1996
<PAGE>
BABY SUPERSTORE, INC.
1201 WOODS CHAPEL ROAD
DUNCAN, SOUTH CAROLINA 29334
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Baby Superstore, Inc. (the "Company") to
be used in voting at the Annual Meeting of Shareholders of the Company to be
held in the Carolina Ballroom of the Marriott Hotel, One Parkway East,
Greenville, South Carolina, on Tuesday, June 4, 1996, at 1:00 p.m., and at any
adjournments thereof. This Proxy Statement and the accompanying form of proxy
are being mailed to shareholders commencing on or about April 26, 1996.
Any shareholder who executes the form of proxy referred to in this
Proxy Statement may revoke it at any time before it is exercised. The proxy may
be revoked by either giving written notice to the Secretary of the Company of
such revocation, or by executing and delivering to the Secretary of the Company
a proxy bearing a later date. The voting of such proxy will be suspended if the
shareholder executing the proxy attends the Annual Meeting and elects to vote in
person. Whether or not you plan to attend, you are urged to sign and return the
enclosed proxy.
The cost of preparing, assembling and mailing this Proxy Statement and
the form of proxy will be borne by the Company. Directors, officers and
employees of the Company may also solicit proxies personally or by mail,
telephone or telegram. No compensation will be paid for such solicitations. In
addition, the Company will bear the reasonable expenses of brokerage houses and
other custodians, nominees and fiduciaries who, at the request of the Company,
may send proxies and proxy solicitation material to their clients and
principals.
VOTING SECURITIES OUTSTANDING
The Board of Directors has fixed the close of business on April 26,
1996 as the record date and time for the determination of shareholders entitled
to notice of, and to vote at, the Annual Meeting and at any adjournments
thereof. As of such date, there were 19,232,833 issued and outstanding shares of
the Company's no par value common stock (the "Common Stock"). All of such shares
are eligible to be voted on each matter currently scheduled to come before the
Annual Meeting, and there are no other outstanding shares of capital stock of
the Company eligible to be voted at the Annual Meeting. Cumulative voting for
the election of directors is not available under the Company's Articles of
Incorporation. Consequently, each eligible share of Common Stock is entitled to
one vote on each matter to be voted upon at the Annual Meeting.
The Bylaws of the Company provide that the presence in person or by
proxy of the holders of a majority of the outstanding shares of Common Stock
entitled to vote at the Annual Meeting is necessary to constitute a quorum at
the meeting and at any adjournments thereof. If a quorum is not present or
represented at the Annual Meeting, the chairman of the meeting or the
shareholders holding a majority of the shares of Common Stock entitled to vote,
present in person or represented by proxy, have the power to adjourn the meeting
from time to time without notice, other than an announcement at the meeting,
until a quorum is present or represented. Directors, officers and employees of
the Company may solicit proxies for the reconvened Annual Meeting in person or
by mail, telephone or telegram. At any such reconvened Annual Meeting at which a
quorum is present or represented, any business may be transacted that might have
been transacted at the meeting as originally scheduled.
The Company's Chief Executive Officer, Jack P. Tate, and the Company's
President, Linda M. Robertson, together own over 50% of the Common Stock
eligible to be voted at the Annual Meeting. Consequently, these two
shareholders, acting together, are in a position to control the outcome of each
matter currently scheduled to be brought to a vote at the Annual Meeting. Each
of these shareholders has indicated to the Company that such shareholder intends
to vote all of the shares of Common Stock owned by such shareholder in favor of
the election of each of the seven nominees for election as a director and in
favor of the ratification of the appointment of the
1
<PAGE>
Company's independent auditors. In such event, each of the seven nominees listed
in this Proxy Statement will be elected to the Board of Directors and the
appointment of Deloitte & Touche LLP as the Company's independent auditors for
the fiscal year ending January 29, 1997 will be ratified, regardless of the
votes that may be cast by the holders of the balance of the outstanding shares
of Common Stock.
PROPOSAL ONE
ELECTION OF DIRECTORS
Pursuant to the authority granted to it by the Company's Bylaws, the
Board of Directors has set the size of the Board of Directors at seven members.
The Board of Directors has recommended each of the seven current members of the
Board of Directors as the seven nominees for election as directors at the Annual
Meeting, to serve until the next annual meeting of shareholders or until their
respective successors shall have been elected and shall have qualified. The
following are the Company's seven nominees for election as directors at the
Annual Meeting: Jack P. Tate, Linda M. Robertson, Jodi L. Taylor, Robert E.
Howard, Kenneth G. Langone, Roger G. Owens and Thomas L. Teague.
In accordance with the Bylaws of the Company, those nominees receiving
the greatest number of votes cast (although not necessarily a majority of the
votes cast) will be elected to the Board of Directors. Abstentions and shares
held in street name that are not voted in the election of directors will not be
included in determining the number of votes cast in the election of directors.
The proxies solicited for the Annual Meeting cannot be voted for a greater
number of persons than the number of nominees named. Cumulative voting in the
election of directors is not permitted by the Company's Articles of
Incorporation. If any nominee becomes unavailable for election for any reason,
the persons named in the form of proxy shall vote for a substitute nominee or
vote to reduce the number of directors to be elected, as directed by the Board
of Directors. The Board of Directors has no reason to believe that any of the
seven nominees listed above will not be available for election as a director.
THE PERSONS NAMED IN THE FORM OF PROXY WILL VOTE THE PROXY AS
SPECIFIED. IF NO SPECIFICATION IS MADE, THE PROXY WILL BE VOTED "FOR" THE
ELECTION OF THE NOMINEES SET FORTH ABOVE.
EXECUTIVE OFFICERS AND DIRECTORS
Set forth below are the age and certain other biographical information
with respect to each of the executive officers and directors of the Company.
JACK P. TATE, 52, has served as Chairman of the Board of Directors of
the Company since 1988 and as the Company's Chief Executive Officer and a
director since he founded the Company in 1970. From 1970 to June 1994, he served
as the Company's Treasurer, and from 1970 to October 1993, he served as the
Company's President. Mr. Tate received his undergraduate degree from the
University of North Carolina in 1966 and his law degree from Harvard Law School
in 1969.
LINDA M. ROBERTSON, 46, has served as President of the Company since
October 1993 and as Chief Operating Officer and a director of the Company since
it was founded in 1970. From 1970 to October 1993, she served as the Company's
Vice President, and from 1970 to June 1994, she served as the Company's
Secretary.
JODI L. TAYLOR, 33, has served as the Chief Financial Officer of the
Company since March 1994, as Treasurer and Secretary of the Company since June
1994, and as a director of the Company since June 1993. Ms. Taylor joined the
Company in November 1986 as Accounting Manager and served as the Company's
Controller from December 1987 through March 1994. Prior to joining the Company,
she worked for two and one-half years with the Columbia and Greenville, South
Carolina offices of Deloitte & Touche. Ms. Taylor has been a Certified Public
Accountant since 1984.
2
<PAGE>
ROBERT E. HOWARD, 49, has served as a director of the Company since
June 1991 and has served as Senior Vice President and Manager of the Personal
Trust Offices for NationsBank, National Association (Carolinas) (or its
predecessor companies) since December 1991. Mr. Howard has held various
executive positions with NationsBank (or its predecessor companies) since June
1968, including State Executive for South Carolina Private Banking and Personal
Trust from February 1990 to November 1991. The Company maintains a commercial
banking relationship with NationsBank, National Association (Carolinas).
KENNETH G. LANGONE, 60, has served as a director of the Company since
July 1994. In 1974, Mr. Langone founded Invemed Associates, Inc., a New York
Stock Exchange member firm engaged in investment banking and brokerage, and he
has served as its Chairman of the Board, Chief Executive Officer and President
since that time, and is principal shareholder of its corporate parent. Mr.
Langone serves on the Board of Directors of GMIS, Inc., Paltex Corporation, St.
Jude Medical, Inc., The Home Depot, Inc., Unifi, Inc. and United States
Satellite Broadcasting Company, Inc.
ROGER G. OWENS, 56, has served as a director of the Company since April
1995. In September 1993, Mr. Owens founded Save Our Sons, Inc., a nonprofit
corporation dedicated to reducing the incarceration rate for young African
American males, and he has served as its President since that time. Mr. Owens
was employed with the Liberty Life Insurance Company from February 1975 until
August 1993, and served as its General Auditor from March 1986 until August
1993.
THOMAS L. TEAGUE, 54, has served as a director of the Company since
November 1994. Mr. Teague has served since 1967 as President and Chief Operating
Officer of Salem Leasing Corporation, a full service truck leasing operation
based in Winston-Salem, North Carolina. Mr. Teague is a shareholder of the
parent of Invemed Associates, Inc.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of four meetings
during the Company's fiscal year ended January 31, 1996. No director attended
fewer than 75% of the total of such meetings and the meetings of the committees
upon which he or she served. Pursuant to the Bylaws of the Company, the Board of
Directors has established an Audit Committee, a Compensation Committee and a
Nominating Committee.
The Audit Committee is currently composed of Messrs. Howard and Owens.
During a portion of fiscal 1995, Mr. Langone held the position on the Audit
Committee currently held by Mr. Owens. This committee makes recommendations
regarding the Company's independent accountants, considers the adequacy of
internal accounting controls, reviews the results and scope of the audit and
other services provided by the Company's independent accountants, and undertakes
other activities related to the fiscal affairs of the Company. No directors of
the Company who are also executive officers may serve on the Audit Committee.
This committee met two times in connection with the audit of the Company's
financial statements for the fiscal year ended January 31, 1996.
The Compensation Committee is currently composed of Messrs. Langone and
Teague. This committee considers and oversees the development of programs to
attract and compensate employees, makes recommendations concerning salaries and
incentive compensation for employees of, and consultants to, the Company, and
administers the Company's Incentive Plan for employees. During fiscal 1995, no
directors of the Company who were also executive officers of the Company have
served on the Compensation Committee or have participated in deliberations of
such committee concerning executive officer compensation. This committee met one
time during the fiscal year ended January 31, 1996.
The Nominating Committee is currently composed of Messrs. Tate and
Howard and Ms. Robertson. This committee is charged with making recommendations
to the full Board of Directors for the selection of director nominees. There is
no formal procedure for the submission of shareholder recommendations. This
committee met one time during the fiscal year ended January 31, 1996.
3
<PAGE>
SECURITY OWNERSHIP
The following table sets forth certain information known to the Company
regarding the beneficial ownership of the Common Stock of the Company as of
April 26, 1996. Information is presented for (i) shareholders owning more than
five percent of the outstanding Common Stock, (ii) each director and executive
officer of the Company, individually, and (iii) all directors and executive
officers of the Company, as a group.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED (1)
--------------------------------------------
NAME NUMBER PERCENT
- --------------- -------------------- ----------------
<S> <C> <C>
Jack P. Tate (2).................................................................. 9,000,000 46.3%
Linda M. Robertson (3)............................................................ 900,000 4.7
Kenneth G. Langone (4)............................................................ 105,000 *
Thomas L. Teague (5).............................................................. 80,010 *
Robert E. Howard (6).............................................................. 79,385 *
Jodi L. Taylor ................................................................... 67,229 *
Roger G. Owens (6)................................................................ 5,048 *
All directors and executive officers as a group
(7 persons)..................................................................... 10,236,672 52.1
</TABLE>
- ----------------
* Amount represents less than 1.0%.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting or investment
power with respect to securities. Shares of Common Stock issuable upon
the exercise of stock options or stock warrants currently exercisable
or convertible, or exercisable or convertible within sixty days, are
deemed outstanding for computing the percentage ownership of the person
holding such stock options or stock warrants, but are not deemed
outstanding for computing the percentage ownership of any other person.
Except as otherwise indicated, the Company believes that the beneficial
owners of the Common Stock listed in the table, based on information
furnished by such owners, have sole investment and voting power with
respect to such shares.
(2) Shares reflected as beneficially owned include 202,500 shares issuable
pursuant to currently exercisable stock options. See "Management
Compensation - Option Exercises and Fiscal Year-End Option Values." The
address of Mr. Tate is 1201 Woods Chapel Road, Duncan, South Carolina
29334.
(3) Shares reflected as beneficially owned include 67,500 shares issuable
pursuant to currently exercisable stock options. See "Management
Compensation - Option Exercises and Fiscal Year-End Option Values."
(4) Shares reflected as beneficially owned include 65,250 shares issuable
pursuant to a currently exercisable stock warrants and 5,000 shares
issuable pursuant to currently exercisable stock options.
(5) Shares reflected as beneficially owned include 65,250 shares issuable
pursuant to currently exercisable stock warrants, 5,000 shares issuable
pursuant to currently exercisable stock options and 10 shares held by a
family member.
(6) Shares reflected as beneficially owned include 5,000 shares issuable
pursuant to currently exercisable stock options.
4
<PAGE>
MANAGEMENT COMPENSATION
EXECUTIVE COMPENSATION
The following table summarizes the compensation earned for services
provided during the fiscal year ended January 31, 1996 (fiscal 1995) and during
each of the preceding two fiscal years, by the Company's Chief Executive Officer
and by each of the other executive officers of the Company whose total earned
salary and bonus compensation from the Company exceeded $100,000 during fiscal
1995 (collectively, the "Named Executive Officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------
---------------------------------------------------
SECURITIES
NAME AND PRINCIPAL FISCAL OTHER ANNUAL UNDERLYING ALL OTHER
POSITION YEAR SALARY (1) BONUS COMPENSATION OPTIONS (2) COMPENSATION
- --------------------- ----------- -------------- ------------- ------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
JACK P. TATE 1995 $ 250,000 $ -0- $ -0- -0- $ -0-
CHAIRMAN OF THE 1994 254,000 -0- 4,530 -0- 6,860
BOARD AND CHIEF 1993 254,000 192,500 -0- -0- 76,860
EXECUTIVE OFFICER
LINDA M. ROBERTSON 1995 196,500 -0- -0- -0- -0-
PRESIDENT AND CHIEF 1994 154,000 46,500 4,530 -0- -0-
OPERATING OFFICER 1993 114,000 86,500 -0- -0- -0-
JODI L. TAYLOR 1995 141,250 -0- -0- 10,000 -0-
CHIEF FINANCIAL 1994 88,615 10,000 -0- 71,250 -0-
OFFICER, TREASURER 1993 61,231 15,000 -0- -0- -0-
AND SECRETARY
</TABLE>
- -----------------
(1) Amounts include $4,000 of directors' fees for each of the Named
Executive Officers in fiscal 1994 and for each of Mr. Tate and Ms.
Robertson in fiscal 1993. Amount for Ms. Taylor in fiscal 1993 includes
directors' fees of $2,000. Beginning in fiscal 1995, directors' fees
were no longer paid to Company employees.
(2) Securities represent shares of Common Stock underlying options granted
during the indicated fiscal year. Included in the amount reflected for
Ms. Taylor in fiscal 1994 are options for the purchase of 33,750 shares
of Common Stock that were exercised in fiscal 1994.
OPTION GRANTS
The following table sets forth information with respect to options to
purchase Common Stock granted during the fiscal year ended January 31, 1996 to
the Company's Chief Financial Officer. No options were granted during such year
to any of the other Named Executive Officers.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
----------------------------------------------------------------------------
Potential Realizable Value
at Assumed Annual Rates
Number of Percent of Total of Stock Price Appreciation
Securities Options Granted For Option Term
Underlying To Employees In Exercise Expiration
NAME Options Granted Last Fiscal Year Price Date 5 % 10 %
- ---- --------------- ---------------- ------- ------ ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Jodi L. Taylor 10,000 5.7% $41.50 10/26/05 $261,000 $661,400
</TABLE>
5
<PAGE>
OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information with respect to the Named
Executive Officers relating to stock option exercises for the purchase of Common
Stock during the fiscal year ended January 31, 1996, and the number and value of
unexercised options held at year end.
<TABLE>
<CAPTION>
OPTION EXERCISES AND FISCAL 1995 YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED IN-THE-
UNEXERCISED OPTIONS AT MONEY OPTIONS AT
FISCAL YEAR-END FISCAL YEAR-END (2)
-------------------------- ----------------------------------
SHARES ACQUIRED VALUE
NAME ON EXERCISE REALIZED (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------ ---------------- ----------- ---------- ------------- -------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Jack P. Tate.............. -0- $ -0- 202,500 -0- $ 9,666,050 $ -0-
Linda M. Robertson........ -0- -0- 67,500 -0- 3,216,150 -0-
Jodi L. Taylor............ 6,750 311,530 -0- 47,500 -0- 1,438,750
</TABLE>
- -----------
(1) Amount represents the difference between the aggregate price paid for
the Common Stock upon exercise of the option and the aggregate market
value of such shares based on the last sale price per share of the
Common Stock as reported on the Nasdaq National Market on the day of
exercise.
(2) Calculated on the basis of a per share price of $48.50, the last sale
price per share of the Common Stock as reported on the Nasdaq National
Market on January 31, 1996.
DIRECTOR COMPENSATION
Currently, non-employee directors of the Company are paid a fee of
$1,000 for attendance at each meeting of the Board of Directors. On April 20,
1995, the Company discontinued its practice of reimbursing all directors for
their travel and other out-of-pocket expenses incurred in connection with the
performance of their services as directors. Non-employee directors of the
Company are eligible to receive annual grants of stock options under the
Company's 1995 Stock Option Plan for Outside Directors (the "Outside Director
Plan"). The Outside Director Plan is intended to be a "formula plan" for the
purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended.
Pursuant under the Outside Director Plan, each non-employee director of the
Company who has been elected by the Company's shareholders is eligible to be
granted, on an annual basis, five-year options to purchase 5,000 shares of
Common Stock. All options granted under the Outside Director Plan are
non-qualified options and, as such, are not entitled to the deferral of taxable
income under Section 422 of the Internal Revenue Code of 1986 in connection with
the exercise of such options. The exercise price of all options is the fair
market value of the Common Stock on the date of the grant. An option may be
exercised in whole or in part at any time during its term, but no option may be
exercised after the expiration of five years from the date the option is granted
or prior to the date six months from the date it is granted. Options may be
exercised only during the period in which the option holder remains a director
of the Company and for one year thereafter, unless the director's membership on
the Board of Directors is terminated for cause, in which case all options
granted to such director will expire upon such termination. Options are not
transferrable by option holders and must be paid in full upon exercise. The
Outside Director Plan is administered by a Stock Option Committee of the Board
of Directors that currently consists of Mr. Tate and Ms. Robertson. The Company
has reserved 120,000 shares of Common Stock for issuance under the Outside
Director Plan. On June 27, 1995 automatic grants of options for the purchase of
5,000 shares of Common Stock pursuant to the Outside Director Plan were made to
each of Messrs. Howard, Langone, Owens and Teague at an exercise price of
$45.625 per share. All of such options are currently exercisable.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1995, the Compensation Committee of the Board of
Directors was composed of Messrs. Langone and Teague, neither of whom has served
at any time as an officer of the Company. Mr. Langone is Chairman, Chief
Executive Officer and President of Invemed Associates, Inc. and principal
shareholder of its corporate parent. Invemed Associates, Inc. served as an
underwriter in connection with the Company's public offering of convertible
notes in September 1995 and its public offering of Common Stock in March 1995.
See "Certain Transactions - Investment Banking Relationship."
6
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation of the Company's executive officers is generally
determined by the Compensation Committee of the Board of Directors. The
following report with respect to certain compensation paid or awarded to the
Company's executive officers during fiscal 1995 is furnished by the directors
who then comprised the Compensation Committee.
GENERAL POLICIES
The Company's compensation program is intended to enable the Company to
attract, motivate, reward and retain the management talent to achieve corporate
objectives, and thereby increase shareholder value. It is the Company's policy
to provide incentives to senior management to achieve both short-term and
long-term objectives. To attain these objectives, the Company's executive
compensation program is composed of a base salary and bonus.
BASE SALARY
Base salaries for executive officers are determined by a subjective
assessment of the executive officer's performance, in light of the officer's
responsibilities and position with the Company and the Company's performance
during the preceding fiscal year. In evaluating overall Company performance, the
primary focus is upon financial performance for the year as measured by net
income, total sales and comparable superstore sales. Base salaries are reviewed
annually and from time to time by the Compensation Committee and adjusted
appropriately.
INCENTIVE COMPENSATION
Incentive compensation for certain executive officers is determined
based upon the Company meeting or exceeding set financial criteria, including
sales and profitability. Incentive compensation is reviewed annually and from
time to time by the Compensation Committee and adjusted accordingly.
STOCK OPTIONS
In certain cases where Company ownership is not already deemed to be
significant by the Compensation Committee, executive compensation includes the
grant of stock options in order to more closely align the interests of the
executive with the long-term interests of the shareholders.
CHIEF EXECUTIVE OFFICER COMPENSATION
Jack P. Tate is the original founder of the Baby Superstore concept and
has devoted his career to this concept since opening the first store in March
1971. The Compensation Committee believes that Mr. Tate's entrepreneurial drive,
dedication, commitment and knowledge have been of vital importance to the
successful and ongoing growth of the Company. Mr. Tate's 1995 compensation
consists only of base salary due to his relatively large percentage ownership of
Common Stock. In determining Mr. Tate's base salary, the Compensation Committee
evaluated Mr. Tate's personal performance, the performance of the Company, and
Mr. Tate's long-term commitment to the success of the Company.
The foregoing report has been furnished by the fiscal 1995 members of
the Compensation Committee:
Mr. Kenneth G. Langone
Mr. Thomas L. Teague
CERTAIN TRANSACTIONS
INVESTMENT BANKING RELATIONSHIP
Invemed Associates, Inc. was one of the underwriters in connection with
the Company's public offering of convertible notes in September 1995 and its
public offering of Common Stock in March 1995, and retained discounts and
commissions of $1,568,000 and $1,956,000 respectively, in connection with those
offerings. Kenneth
7
<PAGE>
G. Langone, a director of the Company, is Chairman of the Board, Chief Executive
Officer and President of Invemed Associates, Inc. and principal shareholder of
its corporate parent.
RELATIONSHIPS WITH A PRINCIPAL SHAREHOLDER
During a portion of 1995, Ronald D. Pace was the holder of more than
five percent of the Company's outstanding Common Stock. Mr. Pace serves as a
sales representative for several of the suppliers from whom the Company
purchases inventory. In fiscal 1995, on the basis of information provided by Mr.
Pace, the Company estimates that purchases from suppliers for whom Mr. Pace
acted as representative aggregated approximately $12.2 million. The Company
makes no payments to Mr. Pace in connection with his service as a sales
representative. The Company believes that its purchasing terms with suppliers
represented by Mr. Pace are no less favorable to the Company than its purchasing
terms with its other suppliers.
PERFORMANCE GRAPH
The graph below compares cumulative total shareholder return of the
Common Stock for the period from September 30, 1994 (the month-end following the
commencement on September 27, 1994 of the Company's initial public offering of
Common Stock) to January 31, 1996 (the Company's 1995 fiscal year-end) with The
Nasdaq Stock Market (US) Index and the S&P Specialty Retail Group for the same
period. Total shareholder return represents stock price changes and assumes the
reinvestment of dividends. The graph assumes the investment of $100 on September
30, 1994.
(The performance graph appears here. The plot points are listed in the table
below.)
9/30/94 1/25/95 1/31/96
Baby Superstore, Inc. $ 100 $147.33 $222.03
Nasdaq Stock Market $ 100 $94.58 $132.43
S&P Specialty Retail Group $ 100 $97.27 $90.61
8
<PAGE>
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors, upon recommendation of the Audit Committee, has
reappointed the firm of Deloitte & Touche LLP, certified public accountants, as
independent auditors to make an examination of the accounts of the Company for
the fiscal year ending January 29, 1997. If the shareholders do not ratify this
appointment, other certified public accountants will be considered by the Board
of Directors upon recommendation of the Audit Committee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
A representative of Deloitte & Touche LLP is expected to be in
attendance at the Annual Meeting and will have the opportunity to make a
statement and be available to respond to appropriate questions.
OTHER BUSINESS
The Board of Directors of the Company knows of no other matter to come
before the Annual Meeting. However, if any matter requiring a vote of the
shareholders should be duly presented for a vote, it is the intention of the
persons named in the enclosed form of proxy to vote such proxy in accordance
with their best judgment.
PROPOSALS FOR 1997 ANNUAL MEETING
Shareholder proposals intended to be presented at the 1997 Annual
Meeting of Shareholders must be received by the Company by December 28, 1996 for
possible inclusion in the proxy material relating to such meeting.
ANNUAL REPORT ON FORM 10-K
A copy of the Company's Annual Report on Form 10-K for the year ended
January 31, 1996, which has been filed with the Securities and Exchange
Commission, will be made available to shareholders to whom this Proxy Statement
is mailed, without charge, upon written request to Ms. Jodi L. Taylor, Chief
Financial Officer, Baby Superstore, Inc., 1201 Woods Chapel Road, Duncan, South
Carolina 29334.
By order of the Board of Directors,
Jack P. Tate
CHAIRMAN OF THE BOARD
April 26, 1996
9
<PAGE>
*******************************************************************************
APPENDIX
P R O X Y
BABY SUPERSTORE, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE 1996 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, JUNE 4, 1996,
IN THE CAROLINA BALLROOM OF THE MARRIOTT HOTEL,
ONE PARKWAY EAST, GREENVILLE, SOUTH CAROLINA,
AT 1:00 P.M. LOCAL TIME.
The undersigned hereby appoints Judy Beltz and Linda McAvoy, or any of them
acting in the absence of the other, as attorneys and proxies of the undersigned,
with full power of substitution, to vote all of the shares of the common stock
of Baby Superstore, Inc., a South Carolina corporation, held or owned by the
undersigned or standing in the name of the undersigned at the 1996 Annual
Meeting of Shareholders of the Company and at any adjournment thereof, and the
undersigned hereby instructs said attorneys to vote as follows:
1. ELECTION OF DIRECTORS
Nominees: Jack P. Tate, Linda M. Robertson, Jodi L. Taylor, Robert E.
Howard, Kenneth G. Langone, Roger G. Owens, Thomas L. Teague
[ ] FOR all nominees listed above (except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY to vote as to any individual nominee. Write the
name(s) of the nominee(s) in the following space:
2. RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT
AUDITORS FOR THE COMPANY FOR THE FISCAL YEAR ENDING JANUARY 29, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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3. In their discretion, upon any other business which may properly come before
the meeting or any adjournment thereof.
DATE:
NUMBER OF SHARES:
SIGNATURE
SIGNATURE, IF HELD JOINTLY
(PLEASE SIGN EXACTLY AS SHOWN ON
ENVELOPE ADDRESSED TO YOU. IF
SECURITIES ARE JOINTLY OWNED, EACH
SHOULD SIGN.)
THIS PROXY WILL BE VOTED AS INSTRUCTED. IN THE ABSENCE OF SUCH INSTRUCTIONS,
THIS PROXY WILL BE VOTED "FOR" MATTERS (1) AND (2) ABOVE, AND THE PROXIES HEREIN
NAMED WILL VOTE ON OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING OR
ANY ADJOURNMENT THEREOF IN ACCORDANCE WITH THEIR JUDGMENT.
