UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
_______________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): March 11, 2008
| Bakers Footwear Group, Inc. | |
| (Exact Name of Registrant as Specified in Charter) | |
Missouri | | 000-50563 | | 43-0577980 |
(State or Other
Jurisdiction of
Incorporation) | | (Commission
File Number) | | (I.R.S. Employer
Identification Number) |
2815 Scott Avenue
St. Louis, Missouri | | 63103 |
(Address of Principal Executive Offices) | | (Zip Code) |
Registrant’s telephone number, including area code:
(314) 621-0699
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Compensation of Executive Officers
On March 11, 2008, the executive officers of Bakers Footwear Group, Inc. (the “Company”) received grants of nonqualified stock options with an exercise price of $1.95 per share, which was the closing price on the date of grant, as established by the Company’s Board of Directors, subject to five year vesting schedules, pursuant to the Bakers Footwear Group, Inc. 2003 Stock Option Plan, as amended (the “2003 Plan”). A summary of the stock option grants for the executive officers is attached as Exhibit 10.1 hereto and is incorporated herein by reference. The Company’s form of Nonqualified Stock Option Award Agreement under the 2003 Plan is attached hereto as Exhibit 10.2 and is incorporated herein by reference. A copy of the Company’s 2003 Plan is attached hereto as Exhibit 10.3 and is incorporated herein by reference. The foregoing description of such exhibits contained herein is qualified in its entirety by the full text of such exhibits.
On March 13, 2008, the Company also entered into cash bonus arrangements with the executive officers of the Company (the “Bonus Letters”), which set forth the potential bonus levels for those officers for the fiscal months of February 2008 through January 2009 (the “Bonus Period”). The Bonus Letters were approved by the Company’s Board of Directors on terms generally consistent with the Company’s Cash Bonus Plan. The Bonus Letters outline each officer’s potential cash bonus as a percentage of the officer’s cumulative salary based on the Company’s adjusted EBITDA, which is generally defined in the same manner as it is for purposes of a financial covenant in the Company’s recently announced $7.5 million three-year subordinated secured term loan as described in the Company’s Current Report on Form 8-K filed on February 4, 2008, during the Bonus Period.
For any such bonus to be paid, adjusted EBITDA must be at least $9,300,000, in the case of Mr. Edison, and at least $7,300,000, in the case of the other officers. Maximum bonuses are payable if adjusted EBITDA is $14,500,000 or more. The size of these potential bonuses range between 15% and 112.5% of cumulative salary, depending on the level of adjusted EBITDA, as further set forth in the forms of the Bonus Letters. The maximum amount of this bonus for each officer is set forth below.
Name of executive officer | Maximum bonus as % of cumulative salary |
Peter A. Edison Chairman of the Board, Chief Executive Officer
and President | 112.5% |
| |
Stanley K. Tusman Executive Vice President and Chief Planning
Officer | 87.5% |
| |
Mark D. Ianni Executive Vice President and Chief
Merchandising Officer | 87.5% |
| |
Joseph R. Vander Pluym Executive Vice President and Chief Operations
Officer | 87.5% |
| |
Charles R. Daniel, III Vice President — Finance, Controller, Treasurer
and Secretary | 87.5% |
In addition to the above bonus, in accordance with the letters, each of the above-named officers may also be entitled to a discretionary bonus equal to 12.5% of the officer’s cumulative salary upon the achievement of qualitative and other criteria relating to that officer’s duties, as communicated to that officer.
The forms of the Bonus Letters are attached hereto as Exhibits 10.4 through 10.8 and are incorporated herein by reference. The foregoing description of such exhibits contained herein is qualified in its entirety by the full text of such exhibits.
Adjusted EBITDA as used above generally is calculated as GAAP net income (loss) before interest, taxes, depreciation and amortization (EBITDA) and excludes certain other items such as changes in the recorded value of outstanding warrants, gains or losses on the sale of property and equipment, impairment of long-lived assets and stock-based compensation expense. EBITDA and adjusted EBITDA are non-GAAP financial measures as such terms are defined in Regulation G under the rules of the Securities and Exchange Commission and should not be considered as an alternative to operating income or net income (as determined in accordance with generally accepted accounting principles (GAAP)) as a measure of our operating performance or to net cash provided by operating, investing and financing activities (as determined in accordance with GAAP) as a measure of our ability to meet cash needs. The Company believes these measures are commonly reported and widely used by investors and other interested parties as a measure of a company’s operating performance because it assists in comparing performance on a consistent basis without regard to capital structure, depreciation and amortization or non-operating factors (such as historical cost). The measures also generally align the Company’s bonus goals with the calculation used in a financial covenant and are useful as a comparison to that covenant. Because these measures are not calculated identically by all companies, our calculations may not be comparable to similarly titled measures of other companies and also may not be comparable in all instances to other similar types of measures.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. See Exhibit Index.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BAKERS FOOTWEAR GROUP, INC. |
| | |
| | |
Date: March 17, 2008 | By: | /s/ Charles R. Daniel, III |
| | Charles R. Daniel, III
Vice President—Finance,
Controller, Treasurer and
Secretary |
EXHIBIT INDEX
Exhibit No. | Description of Exhibit |
| |
10.1 | Summary of March 11, 2008 stock option grants for executive officers of the Company. |
| |
10.2 | Form of Nonqualified Option Award Agreement under Bakers Footwear Group, Inc. 2003 Stock Option Plan, as amended (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 000-50563) filed on March 21, 2007). |
| |
10.3 | Bakers Footwear Group, Inc. 2003 Stock Option Plan, as amended (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (File No. 000-50563), filed on March 21, 2007). |
| |
10.4 | Letter to Peter Edison outlining 2008 bonus levels. |
| |
10.5 | Letter to Stan Tusman outlining 2008 bonus levels. |
| |
10.6 | Letter to Mark Ianni outlining 2008 bonus levels. |
| |
10.7 | Letter to Joe Vander Pluym outlining 2008 bonus levels. |
| |
10.8 | Letter to Charles R. Daniel, III outlining 2008 bonus levels. |
| |
