SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant X
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Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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Syms Corp
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than Registrant)
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________________________________________________________________________________
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:
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paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
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SYMS CORP
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AUGUST 7, 1997
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To the Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders of Syms Corp
(the "Company") will be held at the office of the Company, Syms Way, Secaucus,
New Jersey 07094, on Thursday, August 7, 1997 at 10:30 A.M. for the following
purposes:
1. To elect eight (8) Directors to serve for the term of one (1) year or
until their respective successors have been elected and qualified.
2. To approve the appointment of Deloitte & Touche LLP as independent
accountants of the Company for fiscal year 1998.
3. To vote upon two resolutions which the Company has been informed will be
proposed by stockholders of the Company.
4. To transact such other business as may properly come before the meeting.
The close of business on July 8, 1997 has been fixed as the record date for
the determination of stockholders entitled to notice of, and to vote at, the
meeting and only stockholders of record at such time will be so entitled to
vote.
You are cordially invited to attend the meeting in person if possible. If
you do not expect to be present, please sign and date the enclosed proxy and
return it in the envelope enclosed for this purpose. It will assist us in
keeping down the expenses of the meeting if the stockholders who do not expect
to attend in person return their signed proxies promptly, whether they own a few
shares or many shares. If no direction is indicated in your proxy it will be
voted for Items 1 and 2 above and against the proposals referred to in Item 3
above.
By Order of the Board of Directors
Stephen A. Merns
Secretary
Secaucus, New Jersey
July 11, 1997
1
PROXY STATEMENT
The accompanying form of proxy is solicited on behalf of the Board of
Directors of Syms Corp (the "Company") for use at the August 7, 1997 meeting of
the stockholders of the Company or at any adjournment or adjournments thereof.
The cost of preparing and mailing the proxy and this Proxy Statement and all
other costs in connection with this solicitation of proxies will be borne by the
Company. It is anticipated that the accompanying proxy and this Proxy Statement
will be sent to stockholders of the Company on or about July 11, 1997.
The Company's executive offices are located at Syms Way, Secaucus, New
Jersey 07094.
Proxies in the accompanying form which are properly executed and duly
returned to the Company and not revoked will be voted as specified. Any proxy in
which no direction is specified will be voted in favor of the election of the
nominees for director, for the appointment of Deloitte & Touche LLP as
independent accountants, and against the stockholder proposals. Each proxy
granted is revocable and may be revoked at any time prior to its exercise, by
notifying American Stock Transfer & Trust Co., 40 Wall Street, New York, NY
10005 in writing, or by executing a subsequent proxy. The Company intends to
reimburse brokerage companies and others for forwarding proxy materials to
beneficial owners of stock. The Company is concurrently with the mailing of this
Proxy Statement mailing its Annual Report for its fiscal year ended March 1,
1997 to stockholders of record on July 8, 1997.
Stockholders vote at the annual meeting by casting ballots (in person or by
proxy) which are tabulated by a representative of the Company's independent
transfer agent appointed to serve as Inspector of Election at the meeting and
who has executed and verified an oath of office. The holders of a majority of
the shares of Common Stock issued and outstanding represented in person or by
proxy shall constitute a quorum. Abstentions and broker non-votes are included
in the determination of the number of shares present at the meeting for quorum
purposes but not counted in the tabulations of the votes cast on proposals
presented to stockholders. As indicated in the table below, Mr. Sy Syms
beneficially owns a number of shares sufficient to determine the outcome of
matters to be voted upon at the meeting.
PRINCIPAL HOLDERS OF SECURITIES
The outstanding voting stock of the Company as of July 8, 1997 consisted of
17,700,265 shares of Common Stock, par value $.05 per share ("Common Stock"),
with each share entitled to one vote. Only stockholders of record at the close
of business on July 8, 1997 are entitled to vote at the meeting.
The following table sets forth the record and beneficial ownership of
Common Stock by each person owning of record or known by the Company to own
beneficially more than five (5%) percent thereof.
AMOUNT AND NATURE OF BENEFICIAL
OWNERSHIP OF COMMON STOCK AS OF
NAME AND ADDRESS OF BENEFICIAL OWNER JULY 8, 1997(1) PERCENT OF CLASS
------------------------------------ -------------------------------- -----------------
Sy Syms(2)
Syms Way, Secaucus, New Jersey 07094 ..... 9,781,507 55.3%
Tweedy, Browne Company L.P.
52 Vanderbilt Avenue, New York, NY 10017.. 1,226,647 6.9%
(1) Sole voting and investment power unless otherwise stated.
(2) Includes (a) 9,552,145 shares held of record by the Sy Syms Revocable Living
Trust dated March 17, 1989, as amended (the "Sy Syms Revocable Living Trust;" Sy
Syms retains the sole voting power of such shares and the right to revoke the Sy
Syms Revocable Living Trust at any time), (b) 229,262 shares held for Laura
Merns and (c) 100 shares held as custodian for Jillian E. Merns.
2
ELECTION OF DIRECTORS
At the meeting, eight (8) directors are to be elected for the term of one
(1) year or until their respective successors have been elected and qualified.
It is intended that votes will be cast pursuant to proxies received from holders
of Common Stock of the Company for the nominees listed below, unless the proxy
contains contrary instructions. The affirmative vote of a plurality of the votes
cast at the meeting is necessary for the election of directors.
If any of the nominees listed below are unavailable for election at the
date of the Annual Meeting, the stock represented by the proxy will be voted for
the remaining nominees and for such substitute nominee or nominees as the Board
of Directors, in their judgment, designate. Management at this time has no
reason to believe that any of the said nominees will not be available.
NAME OF DIRECTOR OR NOMINEE FOR ELECTION PRINCIPAL OCCUPATION AGE
- - ---------------------------------------- -------------------- ---
Sy Syms (1) (2) (3)....................... Chairman of the Board and Chief Executive Officer of the Company 71
Marcy Syms (1) (2)........................ President and Chief Operating Officer of the Company 46
Wilbur L. Ross, Jr. (3) (4) (5)........... Managing Director of Rothschild Inc. 59
Harvey A. Weinberg (3) (4) (5)............ Consultant 59
Philip G. Barach.......................... Consultant 67
David A. Messer........................... President of AIG Trading Corporation 36
Stephen A. Merns (2)...................... Vice President, Secretary and Merchandise Manager Men's Tailored 44
Clothing
Antone F. Moreira ........................ Vice President, Treasurer and Chief Financial Officer of the Company 60
- - ----------
(1) Member of the Executive Committee of the Company.
(2) Sy Syms is the father of Marcy Syms and Stephen A. Merns.
(3) Member of the Compensation Committee of the Company.
(4) Member of the Audit Committee of the Company.
(5) Member of the Stock Option Committee of the Company.
SY SYMS has been Chairman of the Board, Chief Executive Officer and a
Director of the Company and/or its predecessors since 1959. Mr. Syms was Chief
Operating Officer of the Company from 1983 to 1984. Mr. Syms has been a Director
of Israel Discount Bank of New York since December 1991.
MARCY SYMS has been President and a Director of the Company since 1983,
Chief Operating Officer of the Company since 1984 and was an officer and
director of Syms Inc. from 1978 through 1985.
WILBUR L. ROSS, JR. has been a Managing Director of Rothschild Inc. since
1976. He is a member of the Board of Directors of Mego Corp. He has been a
Director of the Company since 1983.
3
HARVEY A. WEINBERG has been a consultant since April 1994. From April 1992
to April 1994 he was President and Chief Executive Officer of HSSI, Inc., a
retailer of men's and women's apparel. He was the Chairman of the Board of
Hartmarx Corporation ("Hartmarx") from 1990 to September 1992 and Chief
Executive Officer and Vice Chairman of the Board of Directors of Hartmarx from
1987 to 1990. He is a trustee of Glimcher Realty Trust (a real estate investment
trust). He has been a Director of the Company since December 1992.
PHILIP G. BARACH has been a consultant since March 1993. From 1968 to March
1993 he was Chairman of the Board or Chairman of the Board, President and Chief
Executive Officer of United States Shoe Corp. (manufacturer and retailer of
footwear, apparel and eyewear). He is a member of the Board of the Directors of
Bernard Chaus, Inc. (manufacturer of women's apparel), R.G. Barry Corp.
(manufacturer of foldable slippers and heat/cold preservation products) and
Union Central Insurance Co. (life insurance) and a trustee of Glimcher Realty
Trust (a real estate investment trust). He has been a Director of the Company
since July 1996.
DAVID A. MESSER has been President of AIG Trading Corporation, a subsidiary
of American International Group, Inc. (NYSE: AIG), since January 1994. Prior to
January 1994, Mr. Messer was a Senior Vice President of AIG Trading Corporation,
where he has been employed since March 1990. He has been a Director of the
Company since July 1996.
STEPHEN A. MERNS has been Vice President, Secretary and Merchandise Manager
Men's Tailored Clothing of the Company since January 1, 1986. He was Vice
President and a buyer of men's haberdashery of Syms Inc. from 1980 through 1985
and Secretary of Syms Inc. from 1983 through 1985. He has been a Director of the
Company since July 1996.
ANTONE F. MOREIRA has been Vice President, Treasurer and Chief Financial
Officer of the Company since May 27, 1997. From 1996 to May 1997 Mr. Moreira was
a financial consultant with Equitable Life Assurance Society of the United
States, a financial services organization. From 1990 to 1995, Mr. Moreira was
Executive Vice President, Chief Financial Officer of Stuarts Department Stores,
Inc., a regional discount department store chain operating in New England.
During the fiscal year ended March 1, 1997, there were seven meetings of
the Board of Directors. Each director attended at least 75% of the fiscal 1997
meetings of the Board of Directors and the committees of which he or she was a
member during the 1997 fiscal year.
During 1994 HSSI, Inc., of which Mr. Weinberg was President, Chief
Executive Officer and a Director, filed a voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy
Court for the Northern District of Illinois, Eastern Division.
COMMITTEES OF THE BOARD OF DIRECTORS
The Committees of the Board of Directors include an Audit Committee, an
Executive Committee, Stock Option Committee and a Compensation Committee. The
Board of Directors does not have a nominating committee.
The Audit Committee reviews the engagement of independent accountants,
reviews and approves the scope of the annual audit undertaken by the independent
accountants and reviews the independence of the accounting firm. The Audit
Committee also reviews the audit and non-audit fees of the independent
accountants and the adequacy of the Company's internal control procedures. The
members of the Audit Committee are Wilbur L. Ross, Jr. and Harvey Weinberg. The
Audit Committee met once during fiscal 1997.
The Executive Committee exercises all the powers and the authority of the
Board of Directors in the management and affairs of the Company between meetings
of the Board of Directors, to the extent permitted by law. The members of the
Executive Committee are Sy Syms and Marcy Syms. The Executive Committee did not
meet during fiscal 1997.
4
The Stock Option Committee administers the Company's Amended and Restated
Incentive Stock Option and Appreciation Plan (the "Option Plan") and determines
the officers and key employees to be granted options under the Option Plan and
the number of shares subject to the options. The members of the Stock Option
Committee are Wilbur L. Ross, Jr. and Harvey Weinberg. The Stock Option
Committee did not meet during fiscal 1997, but acted once by unanimous written
consent.
The Compensation Committee reviews and recommends to the Board of Directors
renumeration arrangements and compensation plans (other than the Option Plan)
for the Company's officers and key employees. The Compensation Committee did not
meet during fiscal 1997. The members of the Compensation Committee are Sy Syms,
Wilbur L. Ross, Jr. and Harvey Weinberg.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock by
each director and nominee, each of the executive officers named in the Summary
Compensation Table, and by all directors and executive officers of the Company
as a group.
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
NAME OF BENEFICIAL OWNER OF COMMON STOCK AS OF JULY 8, 1997 PERCENT OF CLASS(1)
- - ------------------------ ---------------------------------- -------------------
Sy Syms................................................... 9,781,507 (1) 55.3%
Marcy Syms................................................ 697,075 (2) 3.9%
Ronald Zindman........................................... 28,000 (2) *
Stephen A. Merns......................................... 734,775 (2) 4.2%
Wilbur L. Ross, Jr........................................ 500 *
Harvey Weinberg........................................... 200 *
Allen Brailsford.......................................... 6,000 (2) *
Philip G. Barach.......................................... 1,000 *
David A. Messer........................................... -- *
Antone F. Moreira......................................... -- *
All directors and executive officers as a group (10 persons) 11,249,057 63.5%
- - ----------
* Less than one percent.
(1) Includes (a) 9,552,145 shares held in the Sy Syms Revocable Living Trust,
(b) 229,262 shares held for Laura Merns and (c) 100 shares held by Sy Syms
as custodian for Jillian E. Merns.
(2) Includes shares issuable upon the exercise of options granted under the
Option Plan and either currently exercisable or exercisable within 60 days
after July 8, 1997.
5
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by the Company and its
subsidiaries for the past three fiscal years, and for the 1995 calendar year, to
its five most highly compensated executive officers, including the Chief
Executive Officer, serving as such at the end of the most recently completed
fiscal year.
SUMMARY COMPENSATION TABLE
LONG-TERM ALL OTHER
COMPENSATION(1) COMPENSA-
NAME AND PRINCIPAL POSITION YEAR* SALARY BONUS OPTIONS/SARS(*) TION(2)
--------------------------- ----- ---------------- ------- --------------- ----------
Sy Syms.................................. 1997 $824,988 (4) 0 0 $3,616
Chairman of the Board and 1996 $855,756 (3) (4) 0 0 $2,306
Chief Executive Officer 1995 $824,988 (4) 0 0 $2,306
1994 $624,988 (4) 0 0 $2,368
Marcy Syms .............................. 1997 $469,000 0 0 $3,616
President and Chief Operating 1996 $515,154 (3) (5) 0 0 $2,306
Officer 1995 $469,000 (5) 0 0 $2,306
1994 $469,000 (5) 0 0 $2,368
Ronald Zindman........................... 1997 $233,000 $10,000 100,000 $3,616
Executive Vice President- 1996 $206,000 0 0 $2,306
General Merchandise Manager 1995 $198,000 0 0 $2,306
1994 $142,000 $10,000 0 $2,368
Stephen A. Merns......................... 1997 $145,200 0 0 $3,441
Vice President, Secretary and 1996 $137,800 0 0 $2,069
Merchandise Manager Men's 1995 $135,200 0 0 $2,069
Tailored Clothing 1994 $130,000 0 0 $2,030
Allen Brailsford......................... 1997 $103,800 $10,000 0 $2,423
Vice President - Operations 1996 $100,200 0 0 $1,453
1995 $ 97,500 0 0 $1,453
1994 $ 93,600 $10,000 0 $1,583
- - ----------
* During 1995, the Company changed its fiscal year end to the Saturday
nearest to the end of February. Accordingly, fiscal year information is
provided for the 52 weeks ended March 1, 1997, for the 53 weeks ended March
2, 1996, for the 1995 calendar year, and for 1994 fiscal year, which ended
December 31, 1994.
(1) During the period covered by the table, the Company did not make any
restricted stock awards or have in effect (or make payments under) any long
term incentive plan other than the Option Plan, pursuant to which only
stock options, but no stock appreciation rights, were awarded.
(2) Company's contributions to a defined contribution profit sharing retirement
plan.
(3) Mr. Sy Syms is paid at a weekly rate of $15,865.15 and Ms. Marcy Syms is
paid at a weekly rate of $9,019.23. The compensation reported for Mr. Syms
and Ms. Syms for the period ended March 2, 1996 is for 53 weeks and
reflects certain adjustments recorded in the second half of calendar 1995
in order for their calendar 1995 salary to amount to $824,988 and $469,000,
respectively.
(4) Excludes payments made under the lease of the Elmsford store. See "Other
Transactions."
(5) Includes payment of $300,000 for the fiscal years ended March 1, 1997 and
March 2, 1996, $300,000 for 1995 and $300,000 for 1994 by Syms Advertising,
Inc., a subsidiary of the Company, as performance fees for advertising
during such years.
6
OPTION/SAR
GRANTS IN LAST FISCAL YEAR
The following table provides information concerning stock options granted
during fiscal 1997 to the executive officers named in the Summary Compensation
Table and related value information. No stock appreciation rights ("SARs") were
granted to the named executive officers. All grants were made pursuant to the
Option Plan.
POTENTIAL REALIZED VALUES
INDIVIDUAL GRANTS AT ASSUMED ANNUAL RATES OF
----------------- % OF TOTAL STOCK PRICE APPRECIATION
OPTIONS/SARS FOR OPTION TERM
OPTIONS/ GRANTED TO EXERCISE OR COMPOUNDED ANNUALLY
SARS EMPLOYEES IN BASE PRICE EXPIRATION -----------------------------
NAME GRANTED FISCAL 1997 ($/SHARE)(2) DATE 5% 10%
- - ---- ---------- ------------ ------------ ---------- ------- ----------
Ronald Zindman......... 100,000(1) 100% $8.00 9/18/2006 $503,116 $1,274,994
- - ----------
(1) Consists of incentive stock options at a per share option exercise price
equal to the fair market value of the Company's Common Stock on the date of
the grant. The term of the option is ten years. The options become
exercisable at the rate of 12.5% per year.
(2) The exercise price may be paid by delivery of already owned shares of the
Company's Common Stock.
AGGREGATED OPTION/SAR EXERCISES
IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
The following table provides information concerning exercises of stock
options during fiscal 1997 by the executive officers named in the Summary
Compensation Table and the value of unexercised options held by them at year
end.
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
NUMBER OF OPTIONS/SARS AT FISCAL IN-THE -MONEY
SHARES YEAR END (1) OPTIONS/SARS (2)
ACQUIRED ON VALUE ----------------------------- ----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ---- ----------- -------- ----------- ------------- ----------- -------------
Marcy Syms 0 0 76,000 24,000 $35,000 $ 2,500
Ronald Zindman 0 0 28,000 75,000 28,125 84,375
Stephen A. Merns 0 0 4,000 0 2,000 0
Allen Brailsford 0 0 6,000 0 6,000 0
- - ----------
(1) No SARs are held.
(2) Based upon a closing price of $9.125 per share of Common Stock on February
28, 1997.
7
PENSION PLAN
The following table sets forth the estimated annual benefits payable on
retirement to persons in specified renumeration and years of participation
classifications under the Company's defined benefit pension plan (the "Pension
Plan") for employees not covered under collective bargaining agreements:
HIGHEST FIVE
YEAR 5 15 25
AVERAGE YEARS OF YEARS OF YEARS OF
COMPENSATION PARTICIPATION PARTICIPATION PARTICIPATION
- - ------------ ------------- ------------- -------------
$50,000........................ $1,900 $ 5,700 $ 9,500
75,000........................ 2,850 8,550 14,250
100,000........................ 3,800 11,400 19,000
125,000........................ 4,750 14,250 23,750
150,000........................ 5,700 17,100 28,500
Each participant in the Pension Plan is entitled to an annual retirement benefit
equal to 19% of the average compensation (excluding bonuses) during his five
consecutive highest paid calendar years during the ten years prior to retirement
except that the annual benefit payable to Sy Syms at normal retirement, as per
the plan, cannot exceed $70,000. For the executive officers named in the Summary
Compensation Table, compensation for purposes of the Pension Plan generally
corresponds to the amounts shown in the "Salary" column of the Summary
Compensation Table, but exclusive of the performance fees from Syms Advertising,
Inc. Currently no more than $150,000 (as adjusted from time to time by the
Internal Revenue Service) of cash compensation may be taken into account in
calculating benefits payable under the Pension Plan. Executive officers in the
Summary Compensation Table were credited with the following years of service at
December 31, 1996: Sy Syms, 15 or more years; Marcy Syms, 15 or more years;
Ronald Zindman , 7 years; Stephen A. Merns, 15 or more years; and Allen
Brailsford, 15 or more years. Benefits under the Pension Plan are not subject to
any deduction for social security or other offset amount. The annual retirement
benefit is reduced pro rata if the employee has completed less than fifteen
years of service. Effective December 31, 1994, the plan was amended to change
the pro rata reduction to be based on 25 years of participation. A participant
is entitled to be paid his benefits upon his retirement at age 65. If a
participant has completed at least 15 years of service he may retire upon
reaching age 55 but the benefits he receives will be actuarially reduced to
reflect the longer period during which he will receive a benefit. A participant
who leaves the Company for any reason other than death, disability or retirement
will be entitled to receive the vested portion of his benefit payable over
different periods of time depending on the aggregate amount vested and payment
option elected. A participant's interest vests over a 7 year period commencing
in the third year at the rate of 20% after completing three years of employment
and 20% for each year thereafter, and is 100% vested after the completion of 7
years of service. Benefit payments are made in the form of one of five annuity
payment options elected by the participant. Amounts in the table are based on a
straight life annuity.
COMPENSATION OF DIRECTORS
Each member of the Board of Directors who is not an officer or employee of
the Company receives a Director's Fee presently established at the rate of
$2,000 per meeting for attending regular or special meetings of the Board of
Directors, or any committee of the Board of Directors, together with travel
expenses related to such attendance.
8
EMPLOYMENT AGREEMENTS
The Company has entered into an employment agreement dated November 1, 1996
with its Executive Vice President, General Merchandising Manager, Ronald
Zindman. The agreement stipulates a minimum yearly salary of $225,000 per year
from the date to hereof through March 1, 1997; $300,000 per year for the next
succeeding three (3) years; $350,000 per year for the next succeeding three (3)
years; $400,000 per year for the next succeeding three (3) years and $450,000
per year for the final three (3) years of the Agreement. The Agreement is to
remain in effect until March 1, 2009. Termination by the Company before that
date will require a payment to Mr. Zindman equal to 150% of one year's salary
(at the employee's then current rate). If this agreement is terminated by the
employee prior to its final term, the Company must pay to the employee a sum
equal to 60% of one year's salary (also at the employee's then current rate).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER INFORMATION
The members of the Compensation Committee of the Board of Directors are
Wilbur L. Ross, Jr. and Harvey Weinberg, each of whom is a non-employee
director, and Sy Syms, who is Chairman of the Board and Chief Executive Officer
of the Company (see "Other Transactions").
No executive officer of the Company served during fiscal 1997 (i) as a
member of the compensation committee or other board committee performing
equivalent functions or, in the absence of any such committee, the entire board
of directors, of another entity, one of whose executive officers serves on the
compensation committee of the Company; (ii) as a director of another entity, one
of whose executive officers served on the compensation committee of the Company;
or (iii) as a member of the compensation committee or other board committee
performing equivalent functions or, in the absence of any such committee, the
entire board of directors, of another entity, one of whose executive officers
served as a director of the Company.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the following Performance
Graph and "Report of the Compensation Committee" shall not be incorporated by
reference into any such filings.
PERFORMANCE GRAPH
Below is a graph comparing the cumulative total stockholder return on the
Company's Common Stock for the last five fiscal years (beginning December 31,
1991 and ending March 1, 1997) with the cumulative total return of the Wilshire
5000 Index and the S&P Retail Composite Index (assuming the investment of $100
on December 31, 1991 in the Company's Common Stock and in each of these two
Indexes, and reinvestment of all dividends).
SYMS CORP S&P RETAIL WILSHIRE 5000
--------- ---------- -------------
12/31/91 100.000 100.000 100.000
12/31/92 102.597 116.754 106.153
12/31/93 100.000 110.245 115.261
12/30/94 67.532 99.040 112.361
03/1/96 80.519 114.529 156.599
02/28/97 94.805 135.875 187.063
9
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee's executive compensation policy strives to
provide compensation rewards based upon both corporate and individual
performance while maintaining a relatively simple compensation program in order
to avoid the administrative costs which the Compensation Committee believes are
inherent in multiple complex compensation plans and agreements. The Company has
only one employment agreement with an executive officer, Ronald Zindman, and has
only one executive compensation plan, the Option Plan.
The determination of compensation ranges for executive officers reflects a
review of salaries and bonuses for executive officers holding similar positions
in retailers of relatively comparable size and orientation. However, in making
compensation decisions, the Compensation Committee remains cognizant of the
Board of Directors' responsibility to enhance shareholder value. The
Compensation Committee utilizes cash bonuses only in limited circumstances, when
it feels a bonus is merited, based on factors such as an executive's individual
performance and the Company's performance relative to its past performance and
the performance of competitors. The Company has available a long-term incentive
for executives to both remain in the employ of the Company and to strive to
maximize shareholder value through the Option Plan, which aligns the interests
of executives with those of shareholders. Consistent with the purposes of the
Option Plan, in recognition of the critical role of Ronald Zindman, the
Company's Executive Vice President-General Merchandise Manager, in the Company's
future success, the only grant made under the Option Plan during the most recent
fiscal year (options for 100,000 shares) was to Mr. Zindman, who previously held
options for only 3,000 shares.
Determination of Mr. Sy Syms' compensation as the Company's Chief Executive
Officer reflects Company performance and comparison with chief executive officer
compensation of competitors, but also reflects recognition of his unique,
ongoing contribution to the growth, success and profitability of the Company.
As beneficial owner of 55% of the outstanding Common Stock, Mr. Sy Syms
maintains an ongoing and active role in executive compensation matters, and is a
member of the Compensation Committee.
COMPENSATION COMMITTEE
Sy Syms
Wilbur L. Ross, Jr.
Harvey Weinberg
10
OTHER TRANSACTIONS
The Company leases its store in Elmsford, New York of approximately 60,000
square feet from Sy Syms. Sy Syms voluntarily amended the lease as of August 1,
1983 as to its rental provisions based upon independent appraisals. Under the
original and amended leases, the rent payable by the Company consisted of a
fixed annual rent plus a percentage rent based on gross sales of the Elmsford
store. Not more frequently than once every five years, the rental terms may be
adjusted based upon independent appraisals if requested by Sy Syms. Effective
January, 1991, the rental terms were adjusted based upon independent appraisal,
which resulted in a fixed annual rental of $600,000 and the elimination of the
percentage rent based on gross sales. During the fiscal year ended March 1,
1997, the Company paid to Sy Syms $600,000 in fixed rent.
Pursuant to loan and stock purchase agreements entered into between Sy Syms
and Stanley Blacker, Inc. ("SBI") in 1987, as subsequently amended, Sy Syms
personally loaned to SBI approximately $6,000,000 and became a majority
stockholder and member of the Board of Directors of SBI. During 1990, such
shares were assigned to the Sy Syms Revocable Living Trust. Sy Syms retains the
right to vote such shares. During 1990, Marcy Syms became a member of the Board
of Directors of SBI. Sy Syms and Marcy Syms constitute a majority of the Board
of Directors of SBI. Neither Sy Syms nor Marcy Syms have received any salary or
other cash compensation from SBI. The Company's purchases of merchandise from
SBI and a licensee during fiscal 1997 was approximately $5,471,000. The Company
entered into an agreement with the licensee in 1991 to purchase annually
approximately $4,200,000 of suits for a five year period ending December 31,
1996. This agreement has been extended until further notice. The Company
believes the terms upon which it purchases merchandise from SBI and the licensee
are comparable to those obtained from unrelated third parties. As of March 1,
1997, the Company had advanced funds to the licensee, totaling approximately
$2,459,000, for purchases to be received in the Spring and Fall of 1997. A
$2,200,000 provision was made for the fiscal year and fourth quarter ended March
2, 1996 in recognition of current information that the licensee advance may not
be fully recoverable. In addition, the Company has guaranteed a letter of credit
on behalf of the licensee totaling $150,000 which expires on July 5, 1998. It
has also advanced fabric in the approximate amount of $311,000.
On November 22, 1996 the Company loaned the Marcy Syms Revocable Trust
$500,000 toward the purchase of a house for Ms. Syms in Westchester County, New
York. The loan is evidenced by the Trust's note, which is guaranteed by Ms.
Syms, and is secured by a first priority mortgage on the real estate purchased.
The note bears interest at the rate of 6.60% per annum (the then Federal
Mid-Term Rate), payable annually, and the principal of the note is due November
22, 2001.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Ronald Zindman inadvertently failed to timely file a Form 3 upon becoming
an officer of the Company in 1993 and to timely file a Form 5 in connection with
his September 1996 stock option grant. Such reports were subsequently filed.
APPROVAL OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has selected Deloitte & Touche LLP as
the independent accountants for the Company for fiscal year 1998 and recommends
that stockholders approve such appointment. It is the intention of the
individuals named in the proxy to vote in favor of approval of the appointment
of Deloitte & Touche LLP unless proxies are voted to the contrary. The
affirmative vote of a majority of the votes cast at the meeting is necessary for
the approval of auditors.
Deloitte & Touche LLP and its predecessor firms have audited the financial
statements of the Company for more than the past ten fiscal years. A
representative of Deloitte & Touche LLP is expected to be present at the meeting
and will have an opportunity to make a statement if he or she desires to do so
and will be available to respond to appropriate questions from stockholders.
11
STOCKHOLDER PROPOSALS
First Stockholder Proposal
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Mr. Kenneth Steiner, 14 Stoner Avenue, Great Neck, New York 11021, the
owner of 300 shares of Common Stock, has stated that he intends to present the
following proposal at the Annual Meeting. The proposal and supporting statement
are quoted below. The Board of Directors does not support this proposal for the
reasons given below.
"Sale or Merger of Company
Resolved: that the shareholders of the company recommend and deem it
desirable and in their best interest that the board of directors immediately
engage the services of a nationally recognized investment banker to explore all
alternatives to enhance the value of the company. These alternatives should
include, but not be limited to, the possible sale, merger or other transactions
involving the company.
SUPPORTING STATEMENT
In support of the above resolution, the proponent believes that in view of
the under performance of both the company and its share price over the past five
years, the board of directors should take immediate action. An investment banker
should be hired to determine the best possible way to enhance shareholder value.
Current management has been ineffective. The chart on page 8 of the 1996 Proxy
Statement clearly indicates that the company's stock price has significantly
under performed both the S&P retail composite and the Wilshire 5000 index
(between 12/31/90 and 3/1/96). If the above resolution is carried out the
shareholders of SYMS Corporation could finally receive a competitive rate of
return on their invested capital.
I URGE YOUR SUPPORT. VOTE FOR THIS RESOLUTION."
* * * * * *
The Board of Directors recommends a vote AGAINST this proposal.
Contrary to the proponent's assertion, the Company has not under performed
over the past five years and current management has not been ineffective. The
Company reported record earnings for the year ended March 1, 1997, and has been
consistently profitable. It has remained financially healthy and essentially
debt-free in a retail environment of volatility, bankruptcies and downsizing.
Admittedly, the stock market does not appear to have sufficiently
recognized the Company's achievements. The Board believes that a major reason
for this is the small "float" in Company stock, resulting from more than 50% of
the Company's outstanding shares being beneficially owned by Sy Syms. During the
three years beginning in December 1994, Mr. Syms has terminated his family's
voting trust agreement, adding (through December 31, 1996) approximately
4,200,000 shares (24% of outstanding shares) to the float. Since December 31,
1994, the Company's Common Stock has outperformed the S&P retail composite
index.
More fundamentally, the Board believes that when a business is being run
successfully and profitably, serving well its customer and employee
constituencies and building intrinsic value for its long term shareholders, the
Board's fiduciary obligations do not require it to take "immediate action" and
to look into selling the Company because (for reasons unrelated to the Company's
performance) the financial markets have not run up the stock price and short
term investors do not feel rewarded.
12
The Board is committed to the enhancement of shareholder value and
regularly reviews the Company's strategic position and direction as well as
available options and potential alternatives, and from time to time may consult
with investment banking firms in this regard. One of the four outside directors,
Mr. Ross, is an investment banker. However, in light of the Board's belief that
the Company has been operated profitably and is well positioned to continue to
enjoy profitable growth, the Board does not feel that it should be required to
immediately engage a nationally recognized investment banker to explore the
possible sale, merger or other transactions involving the Company, or that (at
this time) this would be a sensible expenditure of Company (and hence
stockholder) funds.
Second Stockholder Proposal
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Mr. William Steiner, 4 Radcliffe Drive, Great Neck, New York 11024, the
owner of 600 shares of Common Stock, has stated that he intends to present the
following proposal at the Annual Meeting. The proposal and supporting statement
are quoted below. The Board of Directors does not support this proposal for the
reasons given below.
"Stock Compensation Proposal
"RESOLVED, that the shareholders recommend that the Board of Directors take
the necessary steps to ensure that from here forward all non-employee directors
should receive a minimum of fifty percent (50%) of their total compensation in
the form of Company stock which cannot be sold for three years."
SUPPORTING STATEMENT
A significant equity ownership by non-employee directors is probably the
best motivator for enhancing shareholder value and facilitating identification
with shareholders.
Traditionally, non-employee directors were routinely compensated with a
fixed fee, regardless of corporate performance. In today's competitive global
economy, outside directors must exercise critical oversight of management's
performance in fostering corporate profitability and shareholder value. All too
often, outside directors' oversight has been too lax, and their actions were too
late to effect any meaningful change.
The history of public corporations in America has too many examples of
directors passively allowing strategic management errors to occur. This results
in eroding corporate and shareholder value.
When compensation takes the form of company stock, there is a greater
likelihood that outside directors will exercise greater diligence in protecting
their own, as well as corporate, and shareholder interests.
What is being recommended in this proposal is neither novel nor untried. A
number of corporations have already established versions of such practices,
namely, Alexander & Alexander, Baxter International, Hartford Steam Boiler,
James River, McGraw Hill, NYNEX, RJR Nabisco, Sunbeam Corporation, The
Travelers, Westinghouse, Woolworth and Zurn Industries.
In June, 1995, the National Association of Corporate Directors' (NACD) Blue
Ribbon Commission on Director Compensation issued a report urging that directors
of public companies be paid their annual fees primarily in company stock to more
closely align their interests with those of shareholders. Several
widely-reported empirical studies have confirmed the potential efficacy of this
approach. Research conducted by Professor Charles M. Elson of the Stetson
University Law School found that those companies whose outside directors held
substantial amounts of company stock tended both to compensate their executives
more reasonably, and outperform those businesses where the directors held little
or no equity, suggesting a link between director stock ownership and better
corporate oversight and performance.
13
It can be argued that awarding stock options to outside directors
accomplishes the same purpose of insuring director's allegiance to a company's
profitability as paying them in stock. However, it is my contention that stock
options entail no downside risk, i.e., while stock options offer rewards should
the stock increase, if the stock price decreases, no penalties ensue. There are
few strategies that are more likely to align the interest of outside directors
with those of shareholder[sic] than one which results in their sharing of the
same bottom line.
I URGE YOUR SUPPORT. VOTE FOR THIS RESOLUTION!"
* * * * * *
The Board of Directors recommends a vote AGAINST this proposal.
While stock ownership in a company may well serve to align directors'
interests with those of stockholders and accordingly the Board may wish to
consider some equity component for Director compensation, the Board feels that
it should not be required to permanently adopt the proponent's specific formula.
The Board and its Compensation Committee is qualified to determine what
compensation package must be designed from time to time in order to attract and
retain qualified directors, while at the same time adhering to the Company's
traditional preference for keeping compensation programs relatively simple and
free of administrative expense.
The Board also feels that the proponent overstates the role that
compensation in the form of company stock plays (and in the case of the Company,
would play) in creating "a greater likelihood that outside directors will
exercise greater diligence in protecting their own, as well as corporate and
shareholder interests." The Company's outside directors are seasoned, successful
businessmen who are well aware of their fiduciary duties to stockholders.
Receipt of their relatively modest director fees from the Company can hardly be
the only rationale for their service to the Company, with its attendant
fiduciary duties and potential for personal liability. Such service also
reflects an element of commitment to making American business and corporations
function properly and profitably in the best interests of their constituents,
including stockholders.
If Company directors received their modest compensation 50% in the form of
Company stock, they would receive (at current stock prices) fewer than 1,000
shares per year. It is the Directors' personal commitment, from the sense of
duty referred to above and loyalty to the Company and its stockholders, upon
which the Directors' performance will depend, not the gains which they can
realistically expect from appreciation on 1,000 (or even several thousand)
shares of Company stock.
NOTICE OF 1998 STOCKHOLDER PROPOSALS
Proposals of stockholders, to be considered by the Company for inclusion in
the proxy material for the fiscal 1998 Annual Meeting, must be received by the
Company no later than March 13, 1998 and must comply with the proxy solicitation
rules of the Securities and Exchange Commission. Proposals should be addressed
to the Secretary, Syms Corp, Syms Way, Secaucus, New Jersey 07094.
OTHER MATTERS
Management does not know of any matters to be brought before the meeting,
except those set forth in the notice thereof. If other business is properly
presented for consideration at the meeting, it is intended that the proxies will
be voted by the persons named therein in accordance with their judgment on such
matters.
Your cooperation in giving this matter your immediate attention and
returning your proxies will be appreciated.
By Order of the Board of Directors
Stephen A. Merns
July 11, 1997 Secretary
14
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
SYMS CORP
AUGUST 7, 1997
Please Detach and Mail in the Envelope Provided
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PLEASE MARK YOUR
A [X] VOTES AS IN THIS
EXAMPLE.
WITHHOLD
FOR all nominees AUTHORITY
listed at right to vote
(except as marked to for all
the contrary nominees listed
1. Election of below) at right
Directors. [ ] [ ]
Nominees: Sy Syms
Instructions: To withhold authority to vote for Marcy Syms
any individual nominee, write that nominee's Antone F. Moreira
name in the space provided below: Wilbur L. Ross, Jr.
Harvey Weinberg
Philip G. Barach
David A. Messer
_________________________________________ Stephen A. Merns
FOR AGAINST ABSTAIN
2. To approve the appointment of Deloitte & [ ] [ ] [ ]
Touche LLP as independent accountants
of the Company for fiscal year 1998.
3. The first stockholder proposal. [ ] [ ] [ ]
4. The second stockholder proposal. [ ] [ ] [ ]
5. In accordance with their best judgment with respect to any other business
that may properly come before the meeting or any and all adjournments
thereof.
In the absence of contrary instructions as provided above, this proxy will be
voted FOR the election as Directors of the nominees, FOR Proposal 2 and AGAINST
Proposals 3 and 4. On any other matters that may come before the meeting this
proxy will be voted in the discretion of the above-named persons.
The undersigned hereby revokes any proxy or proxies heretofore given to vote
upon or act with respect to such shares and hereby ratifies and confirms all
that the above-named individuals or any of them, or their duly appointed
substitute or substitutes, may do by virtue hereof.
SIGNATURE(S) _________________________________________ DATED:__________, 1997
(NOTE: Please sign exactly as your name or names appear on the stock
certificate, and when signing as attorney, executor, administrator,
trustee or guardian, give full title as such. If the signer is a
corporation, sign the full corporate name by duly authorized officer.)
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SYMS CORP
ANNUAL MEETING OF STOCKHOLDERS--AUGUST 7, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Syms Corp (the "Company"), hereby appoints
Sy Syms and Marcy Syms, and each of them (with full power to act without the
other) proxies with full power of substitution, to vote all shares of the
Company held by the undersigned at the Annual Meeting of Stockholders of the
Company (receipt of a copy of the Notice of such meeting and Proxy Statement
being acknowledged) on August 7, 1997 at 10:30 a.m., at the offices of Syms
Corp, Syms Way, Secaucus, New Jersey 07094, upon the following matters and upon
such other business as may properly come before the meeting and any and all
adjournments thereof.
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SEE REVERSE
(CONTINUED AND TO BE DATED AND SIGNED ON REVERSE SIDE.) SIDE
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