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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
Filed by the registrant [x]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
BOOKS-A-MILLION, INC.
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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 the Registrant)
Payment of filing fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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BOOKS-A-MILLION(R)
May 2, 1997
Dear Stockholder:
You are cordially invited to attend the 1997 Annual Meeting of
Stockholders of Books-A-Million, Inc., which will be held at 10:00 a.m. on
Wednesday, June 4, 1997 at The Harbert Center, 2019 Fourth Avenue North,
Birmingham, Alabama 35203.
The principal business of the meeting will be (i) to elect a class of
directors to serve a three-year term expiring in 2000 and (ii) to ratify the
appointment by the Audit Committee of the Board of Directors of Arthur Andersen
LLP to serve as the Company's independent auditor for the fiscal year ending
January 31, 1998. During the meeting, we will also review the results of the
past fiscal year and report on significant aspects of our operations during the
first quarter of fiscal 1998.
Whether or not you plan to attend the Annual Meeting, please complete,
sign, date and return the enclosed proxy card in the postage-prepaid envelope
provided so that your shares will be voted at the meeting. If you decide to
attend the meeting, you may, of course, revoke your proxy and personally cast
your votes.
Sincerely yours,
/s/ Clyde B. Anderson
Clyde B. Anderson
Chief Executive Officer and President
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BOOKS-A-MILLION, INC.
402 INDUSTRIAL LANE
BIRMINGHAM, ALABAMA 35211
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The 1997 Annual Meeting of Stockholders of Books-A-Million, Inc. will
be held at 10:00 a.m. on Wednesday, June 4, 1997 at The Harbert Center, 2019
Fourth Avenue North, Birmingham, Alabama 35203. The meeting is called for the
following purposes:
(1) To elect a class of directors for a three-year term expiring
in 2000;
(2) To ratify the appointment by the Audit Committee of the Board
of Directors of Arthur Andersen LLP to serve as the Company's
independent auditor for the fiscal year ending January 31,
1998; and
(3) To transact such other business as may properly come before
the meeting.
The Board of Directors has fixed the close of business on April 11,
1997 as the record date for the purpose of determining the stockholders who are
entitled to notice of and to vote at the meeting and any adjournment or
postponement thereof.
By Order of the Board of Directors,
/s/ Cynthia W. Clark
Cynthia W. Clark
Secretary
May 2, 1997
Birmingham, Alabama
IF YOU ARE UNABLE TO BE PRESENT AT THE MEETING, YOU ARE REQUESTED TO
COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD SO THAT YOUR SHARES
WILL BE REPRESENTED.
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BOOKS-A-MILLION, INC.
402 INDUSTRIAL LANE
BIRMINGHAM, ALABAMA 35211
PROXY STATEMENT
This Proxy Statement is furnished by and on behalf of the Board of
Directors of Books-A-Million, Inc. (the "Company") in connection with the
solicitation of proxies for use at the Annual Meeting of Stockholders of the
Company to be held at 10:00 a.m. on Wednesday, June 4, 1997 at The Harbert
Center, 2019 Fourth Avenue North, Birmingham, Alabama 35203 and at any
adjournments or postponements thereof (the "Annual Meeting"). This Proxy
Statement and the enclosed proxy card will be first mailed on or about May 2,
1997 to the Company's stockholders of record on the Record Date, as defined
below.
THE BOARD OF DIRECTORS URGES YOU TO COMPLETE, SIGN, DATE AND RETURN
THE ENCLOSED PROXY CARD IN THE POSTAGE-PREPAID ENVELOPE PROVIDED.
SHARES ENTITLED TO VOTE
Proxies will be voted as specified by the stockholder or stockholders
granting the proxy. Unless contrary instructions are specified, if the enclosed
proxy card is executed and returned (and not revoked) prior to the Annual
Meeting, the shares of common stock, $.01 par value per share (the "Common
Stock"), of the Company represented thereby will be voted (i) FOR the election
as directors of the nominees listed in this Proxy Statement, and (ii) FOR
ratification of the appointment by the Audit Committee of the Board of
Directors of Arthur Andersen LLP to serve as the Company's independent auditor
for the Company's fiscal year ending January 31, 1998 ("fiscal 1998"). The
submission of a signed proxy will not affect a stockholder's right to attend
and to vote in person at the Annual Meeting. A stockholder who executes a proxy
may revoke it at any time before it is voted by filing with the Secretary of
the Company either a written revocation or an executed proxy bearing a later
date or by attending and voting in person at the Annual Meeting.
Only holders of record of Common Stock as of the close of business on
April 11, 1997 (the "Record Date") will be entitled to vote at the Annual
Meeting. As of the close of business on the Record Date, there were 17,427,593
shares of Common Stock (the "Shares") outstanding. Holders of Shares authorized
to vote are entitled to cast one vote per Share on all matters. The holders of
a majority of the Shares entitled to be voted must be present or represented by
proxy to constitute a quorum. Shares as to which authority to vote is withheld
and abstentions are counted in determining whether a quorum exists.
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Under Delaware law, directors are elected by the affirmative vote, in
person or by proxy, of a plurality of the shares entitled to vote in the
election at a meeting at which a quorum is present. Only votes actually cast
will be counted for the purpose of determining whether a particular nominee
received more votes than the persons, if any, nominated for the same seat on
the Board of Directors.
Ratification of the appointment of Arthur Andersen LLP as the
Company's independent auditor for fiscal 1998, as well as any other matter that
may properly come before the Annual Meeting, requires the affirmative vote of a
majority of the Shares represented in person or by proxy and entitled to vote
on such matter. Abstentions will be counted in determining the minimum number
of votes required for approval and will, therefore, have the effect of votes
against such proposal. Broker non-votes, those Shares held by a broker or
nominee as to which such broker or nominee does not have discretionary voting
power, will not be counted as votes for or against approval of such matters.
PROPOSAL I - ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into three classes of
directors serving staggered terms of office. Upon the expiration of the term of
office of a class of directors, the nominees for that class are elected for a
term of three years to serve until the election and qualification of their
successors. The current term of Mr. Clyde B. Anderson and Mr. Ronald G. Bruno
expires upon the election and qualification of the directors to be elected at
this Annual Meeting. The Board of Directors has nominated Mr. Anderson and Mr.
Bruno for re-election to the Board of Directors at the Annual Meeting, to serve
until the 2000 annual meeting of stockholders and until their successors are
duly elected and qualified.
All Shares represented by properly executed proxies received in
response to this solicitation will be voted for the election of the directors
as specified therein by the stockholders. Unless otherwise specified in the
proxy, it is the intention of the persons named on the enclosed proxy card to
vote FOR the election of the nominees listed in this Proxy Statement to the
Board of Directors. The nominees have consented to serve as directors of the
Company if elected. If at the time of the Annual Meeting either of the nominees
is unable or declines to serve as a director, the discretionary authority
provided in the enclosed proxy card will be exercised to vote for a substitute
candidate designated by the Board of Directors. The Board of Directors has no
reason to believe that either of the nominees will be unable or will decline to
serve as a director.
Stockholders may withhold their votes from either or both of the
nominees by so indicating in the space provided on the enclosed proxy card.
Set forth below is certain information furnished to the Company by the
director nominees and by each of the incumbent directors whose terms will
continue following the Annual Meeting.
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NOMINEES FOR ELECTION - TERM EXPIRING 2000
CLYDE B. ANDERSON
Age: 36
Clyde B. Anderson has served as a director of the Company since August
1987. Mr. Anderson has served as the Chief Executive Officer of the Company
since July 1992 and as the President of the Company since November 1987. From
November 1987 to March 1994, Mr. Anderson also served as the Company's Chief
Operating Officer. Mr. Anderson serves on the Board of Directors and the
Compensation Committee of Hibbetts, Inc., a sporting goods retailer. Mr.
Anderson and members of his immediate family hold approximately 13% of the
outstanding common stock of Hibbetts, Inc. Mr. Anderson is the son of Charles
C. Anderson, the Chairman of the Company's Board of Directors.
RONALD G. BRUNO
Age: 45
Ronald G. Bruno has served as the President of Bruno Capital
Management Corporation, an investment company, since September 1995 and has
served as a director of the Company since September 1992. Formerly, Mr. Bruno
served as the Chairman and Chief Executive Officer of Bruno's, Inc., a
supermarket retailing chain, for over five years. Mr. Bruno is a director of
Bruno's, Inc., Russell Corporation, a sports apparel manufacturing company, and
Southtrust Bank of Alabama, N.A.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
FOR THE ELECTION AS DIRECTORS OF THE NOMINEES NAMED ABOVE.
INCUMBENT DIRECTOR - TERM EXPIRING 1998
CHARLES C. ANDERSON
Age: 62
Charles C. Anderson has served as the Chairman of the Board of the
Company for more than 27 years. He also served as the Chief Executive Officer
of the Company from 1964 to July 1992. Mr. Anderson is the father of Clyde B.
Anderson.
INCUMBENT DIRECTORS - TERM EXPIRING 1999
R. LEW BURDETTE
Age: 38
R. Lew Burdette has served as a director of the Company since March
1995. Mr. Burdette has served as the Company's Executive Vice President and
Chief Operating Officer
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since April 1994, and from May 1989 to April 1994 he served as the Company's
Vice President - Operations.
JOHN E. SOUTHWOOD
Age: 67
John E. Southwood has served as a director of the Company since
September 1992. Mr. Southwood served as Vice Chairman of Third National
Corporation from January 1983 to December 1991 and Chairman of Third National
Bank in Nashville, Tennessee from January 1985 to July 1989.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Company's Board of Directors held five meetings during the
Company's fiscal year ended February 1, 1997 ("fiscal 1997"). The Board has an
Executive Committee, an Audit Committee and a Compensation Committee, but does
not have a Nominating Committee. Each director attended all of the meetings of
the Board and the committees of the Board on which he served.
Committees of the Board of Directors. The Executive Committee consists
of Messrs. Charles C. Anderson, Chairman of the Committee, Clyde B. Anderson
and Ronald G. Bruno. The Executive Committee is authorized to exercise all of
the power and authority of the Board of Directors in the management of the
business and affairs of the Company, including, without limitation, the power
and authority to declare a dividend, to authorize the issuance of stock and to
adopt a certificate of ownership and merger pursuant to Section 253 of the
Delaware General Corporation Law. The authority of the Executive Committee does
not extend to certain fundamental corporate transactions. The Committee does
not hold regularly scheduled meetings but meets when necessary.
The Audit Committee consists of Messrs. John E. Southwood, Chairman of
the Committee, Charles C. Anderson and Ronald G. Bruno. The responsibilities of
the Audit Committee include, in addition to such other duties as the Board may
specify, recommending independent auditors, reviewing with the independent
auditors the scope and results of the audit engagement, monitoring the
Company's financial policies and control procedures and reviewing and
monitoring the provision of non-audit services by the Company's auditors. The
Audit Committee held two meetings in fiscal 1997.
The Compensation Committee consists of Messrs. Ronald G. Bruno,
Chairman of the Committee, Charles C. Anderson and John E. Southwood. The
responsibilities of the Compensation Committee include, in addition to such
other duties as the Board may specify, establishing salaries, bonuses and other
compensation for the Company's executive officers and administering the
Company's Stock Option Plan, Employee Stock Purchase Plan and Executive
Incentive Plan. The Compensation Committee held one meeting in fiscal 1997.
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Compensation of Directors. Directors who are not employees of the
Company receive an annual retainer fee of $10,000 and an attendance fee of $500
for each Board and committee meeting attended, as well as reimbursement of all
out-of-pocket expenses incurred in attending all such meetings. In addition,
the Company's non-employee directors are eligible to receive formula grants of
stock options under the Company's Stock Option Plan.
Under the Company's Stock Option Plan, each director who is not an
employee of the Company or its subsidiary who is serving as a director on the
last business day of each calendar year and who has served as such for more
than one year shall automatically be granted options to purchase 6,000 shares
of Common Stock from the Company at the "fair market value" of such Common
Stock (as defined in the Stock Option Plan) on such date. Each of Messrs. Bruno
and Southwood received a grant of options to purchase 6,000 shares of Common
Stock at an exercise price of $6.875 per share on December 31, 1996. These
options are currently exercisable and expire on the earlier of the sixth
anniversary of the date of grant or 90 days after such individual ceases to be
a director of the Company.
Compliance with Section 16(a) of the Securities Exchange Act of 1934.
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors, executive officers and persons who own
beneficially more than 10% of the Company's Common Stock to file reports of
ownership and changes in ownership of such stock with the Securities and
Exchange Commission (the "SEC") and the Nasdaq Stock Market, Inc. Directors,
executive officers and greater than 10% stockholders are required by SEC
regulations to furnish the Company with copies of all such forms they file. To
the Company's knowledge, based solely on a review of the copies of such reports
furnished to the Company and written representations that no other reports were
required, its directors, executive officers and greater than 10% stockholders
complied during fiscal 1997 with all applicable Section 16(a) filing
requirements.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information concerning the beneficial
ownership of Common Stock of the Company of (i) those persons known by
management of the Company to own beneficially more than 5% of the Company's
outstanding Common Stock, (ii) the directors of the Company, (iii) the
executive officers named in the Summary Compensation Table included elsewhere
herein and (iv) all current directors and officers as a group. Such information
is provided as of April 15, 1997. According to rules adopted by the SEC, a
person is the "beneficial owner" of securities if he or she has or shares the
power to vote them or to direct their investment or has the right to acquire
beneficial ownership of such securities within 60 days through the exercise of
an option, warrant, right of conversion of a security or otherwise. Except as
otherwise noted, the indicated owners have sole voting and investment power
with respect to shares beneficially owned. An asterisk in the percent of class
column indicates beneficial ownership of less than 1% percent of the
outstanding Common Stock.
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Amount and Nature of Percent of
Name of Beneficial Owner Beneficial Ownership Class
- ------------------------ -------------------- -----
Charles C. Anderson(1) 3,130,520(2) 18.0
Joel R. Anderson(1) 2,184,540(3) 12.5
Clyde B. Anderson(4) 2,027,300(5) 11.6
R. Lew Burdette 90,724(6) *
Ronald G. Bruno 45,000(7) *
John E. Southwood 27,667(8) *
Sandra B. Cochran 53,628(9) *
Terrance G. Finley 30,488(10) *
All current directors and
officers as a group (7 persons) 5,405,327(11) 30.5
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(1) The business address of Mr. Charles C. Anderson and Mr. Joel R.
Anderson is 202 North Court Street, Florence, Alabama 35630. Mr.
Charles C. Anderson is the Chairman of the Company's Board of
Directors. His brother, Mr. Joel R. Anderson, does not serve as an
officer or director of the Company.
(2) Includes 368,000 shares held in the Ashley Anderson Trust, as to which
Mr. Anderson, as co-trustee, shares voting and investment power. This
number of shares also includes 100,000 shares held by a charitable
foundation of which Mr. Charles C. Anderson is the Chairman of the
Board of Directors.
(3) Includes 100,000 shares held by a charitable foundation of which Mr.
Joel R. Anderson is the Chairman of the Board of Directors.
(4) Mr. Clyde B. Anderson's business address is 402 Industrial Lane,
Birmingham, Alabama 35211.
(5) Includes 100,000 shares held by a charitable foundation of which Mr.
Clyde B. Anderson is a member of the Board of Directors and 104,200
shares subject to options exercisable on or before June 14, 1997.
(6) Includes 66,300 shares subject to options exercisable on or before
June 14, 1997.
(7) Includes 32,000 shares subject to options exercisable on or before
June 14, 1997.
(8) Includes 22,000 shares subject to options exercisable on or before
June 14, 1997.
(9) Includes 46,900 shares subject to options exercisable on or before
June 14, 1997.
(10) Includes 28,000 shares subject to options exercisable on or before
June 14, 1997.
(11) Includes 299,400 shares subject to options exercisable on or before
June 14, 1997.
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EXECUTIVE COMPENSATION
Pursuant to SEC rules for Proxy Statement disclosure of executive
compensation, the Compensation Committee of the Board of Directors of the
Company has prepared the following Report on Executive Compensation. The
Committee intends that this report clearly describe the current executive
compensation program of the Company, including the underlying philosophy of the
program and the specific performance criteria on which executive compensation
is based. This report also discusses in detail the compensation paid to the
Company's Chief Executive Officer, Mr. Clyde B. Anderson, during fiscal 1997.
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee, which consists of Messrs. Ronald G. Bruno
(who served as Chairman throughout fiscal 1997), Charles C. Anderson and John
E. Southwood, was responsible for establishing salaries, bonuses and other
compensation for the Company's executive officers for fiscal 1997, as well as
for administering the Company's Stock Option Plan, Employee Stock Purchase Plan
and Executive Incentive Plan. Each member of the Compensation Committee is a
non-employee director other than Mr. Charles C Anderson, who is an executive
officer of the Company.
Compensation Policy. The Company's executive compensation policy is
designed to provide levels of compensation that integrate compensation with the
Company's annual and long-term performance goals and reward above-average
corporate performance, thereby allowing the Company to attract and retain
qualified executives. Specifically, the Company's executive compensation policy
is intended to:
- Provide compensation levels that are consistent with the
Company's business plan, financial objectives and operating
performance;
- Reward performance that facilitates the achievement of the
Company's business plan goals;
- Motivate executives to achieve strategic operating
objectives; and
- Align the interests of executives with those of stockholders
and the long-term interest of the Company by providing
long-term incentive compensation in the form of stock
options.
In light of the Company's compensation policy, the components of its
executive compensation program for fiscal 1997 were base salaries, cash bonuses
and stock options.
Base Salary. Each executive officer's base salary (including the Chief
Executive Officer's base salary) is based upon a number of factors, including
the responsibilities borne by the executive officer and his or her length of
service to the Company. Each executive officer's
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base salary is reviewed annually and generally adjusted to account for
inflation, the Company's financial performance, any change in the executive
officer's responsibilities and the executive officer's overall performance.
Factors considered in evaluating performance include financial results such as
increases in sales, net income before taxes and earnings per share, as well as
non-financial measures such as improvements in service and relationships with
customers, suppliers and employees, employee safety and leadership and
management development. These non-financial measures are subjective in nature.
No particular weight is given by the Compensation Committee to any particular
factor.
Cash Bonuses. Each executive officer, including the Chief Executive
Officer, is eligible to receive an annual cash bonus of up to 70% of his or her
base salary at the time of the award. Cash bonuses generally are paid pursuant
to a bonus program established at the beginning of a fiscal year in connection
with the preparation of the Company's annual operating budget for such year.
Under this bonus program, an executive officer (including the Chief Executive
Officer) is eligible to receive a bonus upon the Company achieving certain
pre-tax net income goals and the executive officer accomplishing certain
individual performance goals related to his or her job functions.
Stock Options. In September 1992, the Company adopted a Stock Option
Plan under which executive officers, including the Chief Executive Officer, are
eligible to receive stock options. In general, stock option awards are granted
on an annual basis if warranted by the Company's growth and profitability. The
Compensation Committee evaluates the Company's performance against
pre-determined target levels of sales, net income before taxes and earnings per
share in determining whether option grants are warranted and the aggregate
amount of such grants. Under the Stock Option Plan, all stock options granted
have had exercise prices no less than the fair market value (generally, the
closing sale price of a share) of the Company's Common Stock on the date of
grant. All options granted to date to employees become exercisable in equal
annual increments over a five-year period. The Compensation Committee believes
that these features serve to align the interests of executives with those of
stockholders and the long-term interests of the Company. Options to purchase
215,000 shares of Common Stock were granted to a total of four executive
officers in fiscal 1997. The amount of each executive officer's grant of stock
options was based upon an evaluation of such executive officer's
responsibilities and performance, the desirability of long-term service from
the particular executive officer, the aggregate amount of prior stock option
awards to the executive officer and the Company's overall financial
performance. While the Compensation Committee has not established a target
level of stock ownership by the Company's executive officers, it does encourage
such ownership and intends to gradually increase the ownership of the Company's
Common Stock by executive officers and other key employees.
Executive Incentive Plan. During fiscal 1995, the Company adopted the
Books-A-Million, Inc. Executive Incentive Plan (the "Incentive Plan"). The
Incentive Plan provides for awards to certain executive officers of cash,
shares of restricted stock or both, based on the achievement of specific
pre-established performance goals during a three consecutive fiscal year
performance period. No awards were made under the Incentive Plan during fiscal
1997.
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Compensation of Chief Executive Officer. During fiscal 1997, the
Company's Chief Executive Officer, Mr. Clyde B. Anderson, earned compensation
comprised of each of the three components of the Company's executive
compensation program described above. The Compensation Committee established
his compensation after reviewing the compensation packages of other chief
executive officers of publicly-traded retailers (as reported in such companies'
proxy statements). The Compensation Committee considered the size, location,
revenues, earnings and capital structure of the retailers whose chief executive
officers' compensation packages were reviewed, and attempted to provide Mr.
Anderson with comparable compensation based upon the Committee's subjective
comparison of the size, location, revenues, earnings and capital structure of
the Company. In addition, the Compensation Committee awarded Mr. Anderson a
bonus based upon the achievement of specific performance goals. During fiscal
1997, Mr. Anderson also received options to purchase 75,000 shares of Common
Stock at an exercise price of $5.75 per share. Mr. Anderson's options have an
exercise price equal to the fair market value (generally, the closing sale
price of a share) of the Company's Common Stock on the date of grant and vest
in equal annual increments over five years, as do the options granted to other
executive officers of the Company.
Limitations on Deductibility of Compensation. Under the 1993 Omnibus
Budget Reconciliation Act, a portion of annual compensation payable after 1993
to any of the Company's five highest paid executive officers would not be
deductible by the Company for federal income tax purposes to the extent such
officer's overall compensation exceeds $1,000,000. Qualifying performance-based
incentive compensation, however, would be both deductible and excluded for
purposes of calculating the $1,000,000 limit. Although the Compensation
Committee does not presently intend to award compensation in excess of the
$1,000,000 limit, it will continue to address this issue when formulating
compensation arrangements for the Company's executive officers.
Mr. Ronald G. Bruno (Chairman)
Mr. Charles C. Anderson
Mr. John E. Southwood
The Report on Executive Compensation of the Compensation Committee of
the Board of Directors shall not be deemed to be incorporated by reference as a
result of any general incorporation by reference of this Proxy Statement or any
part hereof in the Company's Annual Report to Stockholders or its Annual Report
on Form 10-K.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Interlocks. As indicated above, the Compensation Committee of the
Board of Directors consists of Messrs Ronald G. Bruno, Charles C. Anderson and
John E. Southwood. During fiscal 1997, Mr. Charles C. Anderson, an executive
officer and director of the Company, was also a director of the Company's
wholly-owned subsidiary, American Wholesale Book Company, Inc. ("American
Wholesale"), and Anderson News Corporation ("Anderson News"). During
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fiscal 1997, Mr. Charles C. Anderson also served as an executive officer and
director of five companies and Mr. Clyde B. Anderson served as an executive
officer of two companies owned or controlled by the Anderson family. Such
companies are referred to herein as the "Other Companies." Messrs. Charles C.
Anderson and Clyde B. Anderson, together with members of their immediate
families, own 100% of the outstanding capital stock of Anderson News and Treat
Entertainment, Inc. ("Treat") and a substantial portion of the outstanding
capital stock of the Other Companies. Certain of such related companies have
established compensation committees on which Messrs. Charles A. Anderson and
Clyde B. Anderson participate.
Certain Transactions. During fiscal 1997, the Company entered into
certain transactions in the ordinary course of business with certain entities
affiliated with Messrs. Charles C. Anderson and Clyde B. Anderson, each of
whom, as indicated above, is an executive officer and director of the Company
and an executive officer and/or director of certain of the Other Companies. The
Board of Directors of the Company believes that all such transactions were on
terms no less favorable to the Company than terms available from unrelated
parties for comparable transactions. Significant activities with these entities
are discussed in the following paragraphs.
The Company and American Wholesale purchase certain of their books and
collectibles from Treat. During fiscal 1997, such purchases from Treat totalled
$2,794,592. The Company and American Wholesale also purchase certain of their
paperback books, newspapers, comics, music and a substantial portion of their
magazines from Anderson News. During fiscal 1997, purchases of these items from
Anderson News totalled $20,325,098. The Company and American Wholesale also
purchase certain gifts from time to time from ANCO Far East Importers, Inc.,
which is one of the Other Companies. Such purchases totalled $86,127 in fiscal
1997.
During fiscal 1997, the Company and American Wholesale sold books to
Treat and Anderson News in the amounts of $2,037,657 and $7,764,996,
respectively.
The Company leases its principal executive offices from a trust which
was established for the benefit of the grandchildren of Mr. Charles C.
Anderson. The lease extends to January 31, 2001 and the Company has an option
to extend the term of this lease for five years. During fiscal 1997, the
Company paid rent of approximately $120,000 to the trust under this lease.
Anderson & Anderson LLC, one of the Other Companies, also leases three
buildings to the Company. During fiscal 1997, the Company paid Anderson &
Anderson LLC a total of $287,575 in connection with such leases.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "Compensation Committee Interlocks and Insider Participation -
Certain Transactions" above for a description of certain transactions and
relationships between the Company (or American Wholesale) and other entities
affiliated with certain of its executive officers.
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EXECUTIVE OFFICER COMPENSATION
This section of the Proxy Statement discloses the compensation
awarded, paid to or earned by, the Company's Chief Executive Officer and its
four most highly compensated officers other than the Chief Executive Officer
during fiscal 1997. Such executive officers are hereinafter referred to as the
Company's "Named Executive Officers".
TABLE I - SUMMARY COMPENSATION TABLE
The following table presents the total compensation of the Company's
Named Executive Officers during each of the fiscal years set forth below.
TABLE I - SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
------------------- ----------------------
Number of Securities All Other
Fiscal Salary Bonus Underlying Options Compensation
Name Year $ $(2) (#)(1) $
---- ------ ------ ------- ------ ----------------
- ------------------------------------------------------------------------------------------------------------------------------
Clyde B. Anderson 1997 290,000 10,000 75,000 5,565(3)
Chief Executive Officer 1996 275,000 149,200 35,000 7,319(4)
and President 1995 250,000 125,000 35,000 7,323(5)
- ------------------------------------------------------------------------------------------------------------------------------
Charles C. Anderson 1997 80,000 0 50,000 247(3)
Chairman 1996 75,000 37,500 0 200(4)
1995 70,000 35,000 0 129(5)
- ------------------------------------------------------------------------------------------------------------------------------
R. Lew Burdette 1997 160,000 8,500 50,000(1) 5,261(3)
Executive Vice President 1996 150,000 82,100 27,500(2) 7,368(4)
and Chief Operating Officer 1995 138,000 69,000 25,000(2) 7,282(5)
- ------------------------------------------------------------------------------------------------------------------------------
Sandra B. Cochran 1997 144,000 6,500 50,000(1) 5,381(3)
Executive Vice President and 1996 128,504 68,668 22,500(2) 6,924(4)
Chief Financial Officer 1995 117,500 58,750 20,000 6,967(5)
- ------------------------------------------------------------------------------------------------------------------------------
Terrance G. Finley(6) 1997 110,000 3,500 40,000(1) 5,143(3)
Vice President-Merchandising 1996 100,000 53,600 15,000(2) 4,242(4)
- ------------------------------------------------------------------------------------------------------------------------------
(1) All of the options granted to the Company's Named Executive Officers become
exercisable in 20% increments on the first, second, third, fourth and fifth
anniversaries of the date of grant and expire six years from the date of grant
(or earlier if the optionee dies or ceases to be employed full-time by the
Company).
(2) In fiscal 1995, the Company's Board of Directors adopted the
Books-A-Million, Inc. Executive Incentive Plan and authorized R. Lew Burdette,
Sandra B. Cochran and Terrance G. Finley to participate in such plan. However,
because no awards were made under the Executive Incentive Plan during fiscal
1997, no amounts are included in the table with respect to such plan.
(3) For fiscal 1997, the amounts shown include (i) matching contributions by the
Company to the Company's 401(k) savings plan ("Matching Contributions") of
$4,785, $4,773, $4,946 and $4,815 on behalf of Clyde B. Anderson, R. Lew
Burdette, Sandra B. Cochran and Terrance G. Finley, respectively, and life
insurance premiums of $780, $247, $488, $435 and $328 paid by the Company on
behalf of Clyde B. Anderson, Charles C. Anderson, R. Lew Burdette, Sandra B.
Cochran and Terrance G. Finley, respectively.
-11-
15
(4) For fiscal 1996, the amounts shown include (i) matching contributions by the
Company to the Company's 401(k) savings plan ("Matching Contributions") of
$6,923, $6,972, $6,528 and $3,936 on behalf of Clyde B. Anderson, R. Lew
Burdette, Sandra B. Cochran and Terrance G. Finley, respectively, and life
insurance premiums of $396, $200, $396, $396 and $306 paid by the Company on
behalf of Clyde B. Anderson, Charles C. Anderson, R. Lew Burdette, Sandra B.
Cochran and Terrance G. Finley, respectively.
(5) For fiscal 1995, the amounts shown include (i) Matching Contributions of
$6,999, $6,992 and $6,750 on behalf of Clyde B. Anderson, R. Lew Burdette and
Sandra B. Cochran, respectively, and (ii) life insurance premiums of $324,
$129, $290, and $217 paid by the Company on behalf of Clyde B. Anderson,
Charles C. Anderson, R. Lew Burdette and Sandra B.
Cochran, respectively.
(6) Information with respect to Mr. Finley's salary, bonus and other
compensation for fiscal 1995 has been excluded in accordance with the rules of
the SEC.
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TABLE II - OPTION GRANTS IN FISCAL 1997
This table presents information regarding options granted to the
Company's Named Executive Officers during fiscal 1997 to purchase shares of the
Company's Common Stock. The Company has no outstanding stock appreciation
rights ("SARs") and granted no SARs during fiscal 1997. In accordance with SEC
rules, the table shows the hypothetical "gains" or "option spreads" that would
exist for the respective options based on assumed rates of annual compound
stock price appreciation of 5% and 10% from the date the options were granted
over the full option term.
TABLE II - OPTION GRANTS IN FISCAL 1997
Realizable Value
Individual Grants At Assumed Annual
---------------------------------------------------------------- Rates of Stock Price
Number of Percent of Appreciation for
Securities Total Options Option Term
Underlying Granted to Exercise Price Expiration ---------------------
Name Options Granted(1) Employees Per Share Date 5% 10%
---- --------------- ------------- ----------- ---------- ---------------------
Clyde B. Anderson 75,000 18.8% $5.75 1/24/03 $146,666 $332,736
Charles C. Anderson 50,000 12.5% $5.75 1/24/03 $ 97,777 $221,824
R. Lew Burdette 50,000 12.5% $5.75 1/24/03 $ 97,777 $221,824
Sandra B. Cochran 50,000 12.5% $5.75 1/24/03 $ 97,777 $221,824
Terrance G. Finley 40,000 10.0% $5.75 1/24/03 $ 78,222 $177,459
(1) All of the options granted to the Company's Named Executive Officers become
exercisable in 20% increments on the first, second, third, fourth and fifth
anniversaries of the date of grant and expire six years from the date of grant
or earlier if the optionee dies or ceases to be employed full-time by the
Company.
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TABLE III - OPTION EXERCISES IN FISCAL 1997 AND FISCAL 1997 YEAR-END OPTION
VALUES
None of the Company's Named Executive Officers exercised any stock
options during fiscal 1997. The following table shows the number of shares of
Common Stock subject to exercisable and unexercisable stock options held by
each of the Named Executive Officers as of February 1, 1997. The table also
reflects the values of such options based on the positive spread between the
exercise price of such options and $5.875, which was the closing sale price of
a share of Common Stock reported in the Nasdaq National Market on January 31,
1997 (the last trading day prior to the end of the Company's fiscal year).
TABLE III - FISCAL 1997 YEAR-END OPTION VALUES
Number of Shares Subject to Value of Unexercised
Unexercised Options at In-the-Money Options
February 1, 1997 at February 1, 1997
Name Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------------------- -------------------------
Clyde B. Anderson 97,800/161,200 $0 / $9,375
Charles C. Anderson 0/50,000 $0 / $6,250
R. Lew Burdette 61,900/111,600 $0 / $6,250
Sandra B. Cochran 43,900/97,600 $0 / $6,250
Terrance G. Finley 26,400/69,600 $0 / $5,000
-14-
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PERFORMANCE GRAPH
The following indexed line graph indicates the Company's total return
to stockholders from November 9, 1992, the date on which the Company's Common
Stock began trading on the Nasdaq National Market, to January 31, 1997, the
last trading day prior to the Company's 1997 fiscal year end, as compared to
the total return for the Nasdaq Composite Index and the Nasdaq Retail Trade
Stock Index for the same period.
- ------------------------------------------------------------------------------------------------------------------------------------
Nov. 9, 1992 Jan. 29, 1993 Jan. 28, 1994 Jan. 28, 1995 Feb. 2, 1996 Jan. 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Books-A-Million, Inc. $100 $115 $154 $223 $138 $ 90
- ------------------------------------------------------------------------------------------------------------------------------------
NASDAQ Composite Index $100 $112 $130 $123 $174 $225
- ------------------------------------------------------------------------------------------------------------------------------------
NASDAQ Retail Trade Stocks $100 $106 $114 $101 $114 $140
- ------------------------------------------------------------------------------------------------------------------------------------
* The Company completed its initial public offering of Common Stock on November
9, 1992.
-15-
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PROPOSAL 2 - RATIFICATION OF INDEPENDENT PUBLIC AUDITOR
The Audit Committee of the Company's Board of Directors has appointed
Arthur Andersen LLP to serve as the Company's independent auditor for its
current fiscal year (fiscal 1998). A representative of this firm is expected to
attend the Annual Meeting to respond to questions from stockholders and to make
a statement if he or she so desires.
The Board of Directors believes it is in the Company's interest for
the stockholders to have a role in ratifying the Audit Committee's selection of
independent auditor. If the stockholders were to vote against ratification of
Arthur Andersen LLP as the Company's independent auditor, the Audit Committee
might select another independent auditing firm.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE IN FAVOR OF THE RATIFICATION OF ARTHUR ANDERSEN LLP
AS THE COMPANY'S INDEPENDENT PUBLIC AUDITOR.
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before
the Annual Meeting. However, if any other matters are properly brought before
the Annual Meeting, the persons appointed in the accompanying proxy intend to
vote the Shares represented thereby in accordance with their best judgment.
SOLICITATION OF PROXIES
The cost of the solicitation of proxies on behalf of the Company will
be borne by the Company. In addition, directors, officers and other employees
of the Company may, without additional compensation except reimbursement for
actual expenses, solicit proxies by mail, in person or by telecommunication.
The Company will reimburse brokers, fiduciaries, custodians and other nominees
for out-of-pocket expenses incurred in sending the Company's proxy materials
to, and obtaining instructions relating to such materials from, beneficial
owners.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Any proposal that a stockholder may desire to have included in the
Company's proxy material for presentation at the 1998 annual meeting must be
received by the Company at its executive offices at 402 Industrial Lane,
Birmingham, Alabama 35211, Attention: Mr. Clyde B. Anderson, on or prior to
December 31, 1997.
-16-
20
ANNUAL REPORT
The Company's Annual Report to Stockholders for Fiscal 1997 (which is
not part of the Company's proxy soliciting material) is being mailed to the
Company's stockholders with this proxy statement.
May 2, 1997
Birmingham, Alabama
-17-
21
APPENDIX
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF
BOOKS-A-MILLION, INC.
The undersigned stockholder(s) of Books-A-Million, Inc., a Delaware
corporation (the "Company"), hereby acknowledge(s) receipt of the Notice of
Annual Meeting of Stockholders and Proxy Statement, each dated May 2, 1997, and
hereby appoints Charles C. Anderson and Clyde B. Anderson, or either of them,
proxies and attorneys-in-fact, with full power of substitution, on behalf and in
the name of the undersigned to represent the undersigned at the 1997 Annual
Meeting of Stockholders of the Company to be held at 10:00 a.m. on Wednesday,
June 4, 1997 at The Harbert Center, Birmingham, Alabama, and at any
adjournment(s) thereof, and to vote all shares of Common Stock which the
undersigned would be entitled to vote if then and there personally present, on
the matters set forth below:
(1) To elect the nominees listed below to serve as directors of the Company for
a three-year term expiring in 2000:
Clyde B. Anderson Ronald G. Bruno
[ ] FOR the nominees listed above, [ ]WITHHOLD authority to vote
except as indicated below. for both of the nominees listed
above.
* To withhold authority for any individual nominee, mark "FOR"
above and write the name of the nominee as to whom you wish to
withhold authority in the space below:
- --------------------------------------------------------------------------------
(2) To ratify the appointment by the Audit Committee of the Board of Directors
of Arthur Andersen LLP to serve as the Company's independent auditor for
fiscal 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) In their discretion, upon such other matter or matters which may properly
come before the meeting or any adjournment(s) thereof.
(Continued on Reverse Side)
PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY PROMPTLY. This Proxy, when
properly executed, will be voted in accordance with the directions given by the
undersigned stockholder(s). IF NO DIRECTION IS MADE, IT WILL BE VOTED FOR
PROPOSALS 1 AND 2 ABOVE AND AS THE PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS
AS MAY COME BEFORE THE MEETING.
Dated , 1997
-----------------
------------------------------
Signature
------------------------------
Signature (if held jointly)
Title or authority (if
applicable)
NOTE: Please sign exactly as
name appears hereon. If shares
are registered in more than
one name, the signature of all
such persons are required. A
corporation should sign in its
full corporate name by a duly
authorized officer, stating
his or her title. Trustees,
guardians, executors and
administrators should sign in
their official capacity,
giving their full title as
such. If a partnership, please
sign in the partnership name
by an authorized person.