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SCHEDULE 14A
(RULE 14a)
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 sec. 240.14a-11(c) or sec. 240.14a-12.
THE ELDER-BEERMAN STORES CORP.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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: .......
(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 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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THE ELDER-BEERMAN STORES CORP.
[ELDER-BEERMAN LOGO]
3155 El-Bee Road
Dayton, Ohio 45439
---------------------------------------------------
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
---------------------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
FRIDAY, MAY 28, 1999
AT 8:00 A.M. EASTERN DAYLIGHT TIME
ELDER-BEERMAN DAYTON MALL
2700 STATE ROUTE 725
DAYTON, OHIO 45459
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THE ELDER-BEERMAN STORES CORP.
3155 El-Bee Road
Dayton, Ohio 45439
(937) 296-2700
------------------------
NOTICE OF ANNUAL MEETING
------------------------
The Annual Meeting of Shareholders of The Elder-Beerman Stores Corp.
("Elder-Beerman" or the "Company") will be held on May 28, 1999 at 8:00 a.m.,
eastern daylight time, at Elder-Beerman Dayton Mall, 2700 State Route 725,
Dayton, Ohio 45459. The principal business of the meeting will be:
(1) To elect three Directors for a three-year term expiring in 2002.
(2) To act upon a proposal of the Board of Directors to adopt an
amendment to Elder-Beerman's Amended Code of Regulations.
(3) To transact any other business that may properly come before the
meeting.
The matters expected to be acted upon at the meeting are described in the
enclosed Proxy Statement. In addition, there will be a report on current
developments in the Company.
Only shareholders of record on April 13, 1999 will be entitled to notice of
and to vote at the annual meeting and at any adjournments or postponements of
the meeting. If you own shares through a nominee, you must instruct your nominee
to vote if you wish to have your vote counted.
By Order of the Board of Directors
/s/ Frederick J. Mershad
Frederick J. Mershad
Chairman of the Board
and Chief Executive Officer
April 26, 1999
YOUR VOTE IS IMPORTANT
Please promptly fill out, sign, date and mail the enclosed form of proxy
whether or not you plan to attend the annual meeting. A self-addressed envelope
is enclosed for your convenience. No postage is required if mailed in the United
States. Returning a signed proxy will not prevent you from attending the meeting
and voting in person, if you desire.
------------------------
Also enclosed is a copy of our Annual Report for the year ended January 30,
1999. The Annual Report contains financial and other information about
Elder-Beerman, but is not incorporated into the proxy statement. The Annual
Report is not a part of the proxy soliciting material.
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THE ELDER-BEERMAN STORES CORP.
3155 El-Bee Road
Dayton, Ohio 45439
------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 28, 1999
DATE OF THE PROXY STATEMENT -- APRIL 26, 1999
INFORMATION ABOUT THE ANNUAL MEETING
INFORMATION ABOUT ATTENDING THE ANNUAL MEETING
Our annual meeting (the "Annual Meeting") will be held on Friday, May 28,
1999 at 8:00 a.m., eastern daylight time, at Elder-Beerman Dayton Mall, 2700
State Route 725, Dayton, Ohio 45459.
INFORMATION ABOUT THIS PROXY STATEMENT
We sent you this proxy statement (the "Proxy Statement") and the enclosed
proxy card because Elder-Beerman's Board of Directors is soliciting your
permission to vote your shares of common stock at the Annual Meeting. If you own
Elder-Beerman common stock in more than one account, such as individually and
also jointly with your spouse, you may receive more than one set of these proxy
materials. To assist us in saving money and to provide you with better
shareholder services, we encourage you to have all your accounts registered in
the same name and address. You may do this by contacting Elder-Beerman's
Investor Relations Department at (937) 296-2700.
This Proxy Statement summarizes information that we are required to provide
to you under the rules of the Securities and Exchange Commission and is designed
to assist you in voting your shares. This Proxy Statement, together with the
Notice of Annual Meeting of Shareholders and proxy card, are first being mailed
on or about April 26, 1999, to all shareholders of record at the close of
business on April 13, 1999.
PROPOSALS YOU MAY VOTE ON
1. The election of three directors in Class I, with terms expiring in
2002; AND
2. An amendment to Elder-Beerman's Amended Code of Regulations.
The Board recommends you vote FOR each of the director nominees and FOR the
amendment to the Code of Regulations.
INFORMATION ABOUT VOTING
Shareholders can vote on matters presented at the Annual Meeting in two
ways:
- BY PROXY -- You can vote by signing, dating and returning the enclosed
proxy card. If you do this, the individuals named on the card (your
"proxies") will vote your shares in the manner you indicate. You may
specify on your proxy card whether your shares should be voted for all,
some or none of the nominees for director and whether your shares should
be voted for or against the amendment to the Code of Regulations to be
presented at the meeting. If you do not indicate instructions on the
card, your shares will be voted for the election of the directors and for
the amendment to the Code of Regulations.
- IN PERSON -- You may come to the Annual Meeting and cast your vote there.
You may revoke your proxy at any time before the vote at the Annual Meeting
by sending a written notice of revocation to Elder-Beerman's Secretary prior to
the Annual Meeting or by attending the Annual Meeting and voting in person.
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Each share of Elder-Beerman common stock is entitled to one vote. As of
April 22, 1999, there were 16,037,880 shares of common stock outstanding.
INFORMATION REGARDING TABULATION OF THE VOTE
Elder-Beerman has a policy that all proxies, ballots and votes tabulated at
a meeting of the shareholders are confidential. Representatives of Norwest Bank
Minnesota, NA will tabulate votes and act as Inspectors of Election at the
Annual Meeting.
QUORUM REQUIREMENTS
A quorum of shareholders is necessary to hold a valid meeting. Under
Elder-Beerman's Code of Regulations, if shareholders who are entitled to cast a
majority of all the votes able to be cast at the Annual Meeting are present in
person or by proxy, a quorum will exist to conduct all business at the Annual
Meeting. Abstentions are counted as present for establishing a quorum but broker
nonvotes are not. A broker nonvote occurs when a broker votes on some matters on
the proxy card but not on others because the broker does not have the authority
to do so.
The holders of a majority of the votes represented at the Annual Meeting,
whether or not a quorum is present, may adjourn the meeting without notice other
than by announcement at the meeting of the date, time and location at which the
meeting will be reconvened.
INFORMATION ABOUT VOTES NECESSARY FOR ACTION TO BE TAKEN
ELECTION OF DIRECTORS
The three nominees for director receiving the greatest number of votes will
be elected at the Annual Meeting.
AMENDMENT TO CODE OF REGULATIONS
A majority of all the votes cast at the meeting will be required for the
approval of the amendment to Elder-Beerman's Code of Regulations.
Abstentions and broker nonvotes will have no effect on the result of the
vote on the two items to be presented at the Annual Meeting.
OTHER MATTERS
The Board of Directors does not know of any other matter that will be
presented at the Annual Meeting other than the proposals discussed in this Proxy
Statement. Under our Code of Regulations, generally no business besides the two
items discussed in this Proxy Statement may be conducted or considered at the
Annual Meeting. However, if any other matter properly comes before the Annual
Meeting, the persons you have designated as your proxies will act on such
proposal in their discretion.
REVOCATION OF PROXY
If you give a proxy, you may revoke it at any time before the vote at the
Annual Meeting by giving notice to Elder-Beerman's Secretary in writing prior to
the Annual Meeting or by voting in person at the Annual Meeting.
COSTS OF PROXY SOLICITATION
Elder-Beerman will pay all the costs of soliciting these proxies. In
addition to solicitation by mail, proxies may be solicited personally, by
telegram, telephone or personal interview by an officer or regular employee of
the Company. Elder-Beerman will also ask banks, brokers and other institutional
nominees and fiduciaries to forward the proxy material to their principals and
to obtain authority to execute proxies, and reimburse them for their expenses.
In addition, Elder-Beerman has retained Morrow & Co. to aid in the distribution
and solicitation of proxies, and has agreed to pay them a fee of approximately
$5,000, plus reasonable expenses.
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ITEM NO. 1
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
The Board of Directors has nine members and is divided into three classes.
Each class consists of three members. A single class of directors is elected
annually for a three-year term.
The terms of the following Class I directors expire at the Annual Meeting:
Thomas J. Noonan, Jr., Bernard Olsoff and Laura H. Pomerantz. For election as
Class I directors at the Annual Meeting, the Nominating and Corporate Governance
Committee has recommended, and the Board of Directors has approved, the re-
nominations of Messrs. Noonan and Olsoff and Mrs. Pomerantz to serve as
directors for the three-year term of office that will expire at the Annual
Meeting of Shareholders in the year 2002. Each director elected will serve until
the term of office of the class to which he or she is elected expires and until
the election and qualification of his or her successor.
The directors to be elected will be elected by a plurality of the votes
cast for directors. Except to the extent that shareholders indicate otherwise on
their proxies solicited by Elder-Beerman's Board of Directors, the holders of
such proxies intend to vote the proxies for the election of the director
nominees named in the following table as nominees for election. The Board
believes that the persons nominated will be available to serve. If a vacancy
among the nominees occurs prior to the Annual Meeting, shares of common stock of
Elder-Beerman (the "Common Stock") represented by such proxies will be voted for
such other person or persons to be determined by the holders of such proxies in
their discretion or, so long as such action does not conflict with the
provisions of Elder-Beerman's Amended Articles of Incorporation, the Board of
Directors may, at its discretion, reduce the number of directors to be elected.
The Board of Directors recommends that you vote FOR the three nominees for
director.
Listed below are the names of the three nominees for election to the Board
of Directors in Class I, and those continuing directors in Classes II and III
who have previously been elected to terms that will expire in the year 2000 and
the year 2001, respectively. Also listed is the year in which each individual
first became a director of the Company and the individual's principal occupation
and other directorships.
NOMINEES FOR DIRECTOR FOR THREE-YEAR TERMS ENDING IN 2002:
DIRECTOR
NAME SINCE AGE PRINCIPAL OCCUPATION AND DIRECTORSHIPS
---- -------- --- ----------------------------------------------------
Thomas J. Noonan, Jr...... 1997 59 Mr. Noonan serves as Chief Restructuring Officer of
WSR, Inc., an automotive aftermarket retailer, and
has served in this capacity since August 1998. He
also serves as the Managing Director of the
Coppergate Group, a financial investment and
management company, and has served in this capacity
since April 1993. Mr. Noonan also serves as
Executive Vice President and Chief Financial Officer
of Herman's Sporting Goods, Inc., a sporting goods
retailer that filed for protection under chapter 11
of the United States Bankruptcy Code and is
currently being liquidated, and served in this
capacity since August 1994. Prior to this time, Mr.
Noonan served as Managing Director and Chief
Executive Officer of TFGII, a financial investment
and management company, from January 1993 to October
1994, and as Executive Vice President of Intrenet
Inc., a trucking holding company, from September
1990 to March 1993. Mr. Noonan is also currently a
Director of Intrenet Inc.
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DIRECTOR
NAME SINCE AGE PRINCIPAL OCCUPATION AND DIRECTORSHIPS
---- -------- --- ----------------------------------------------------
Bernard Olsoff............ 1997 70 Mr. Olsoff retired from Frederick Atkins, Inc.
("Frederick Atkins"), a retail marketing and
consulting company, in 1997. Prior to this time, Mr.
Olsoff served as President, Chief Executive Officer
and Chief Operating Officer of Frederick Atkins,
from 1994 to April 1997, and President and Chief
Operating Officer from 1983 to 1994. Mr. Olsoff is
also currently a Director of The Leslie Fay
Companies, Inc., an apparel design and manufacturing
company ("Leslie Fay").
Laura H. Pomerantz........ 1997 51 Mrs. Pomerantz currently serves as President of LHP
Consulting & Management, a real estate consulting
firm, and has served in this capacity since 1995.
Through LHP Consulting & Management, Mrs. Pomerantz
is also associated with Newmark Real Estate Co.,
Inc., a commercial real estate company, as Senior
Managing Director and has served in this capacity
since August 1996. Prior thereto, Mrs. Pomerantz
served as Senior Managing Director of S.L. Green
Real Estate Company, a commercial real estate
company, from August 1995 to July 1996, and was
affiliated with Koeppel Tenor Real Estate Services,
Inc., a commercial real estate company, from March
1995 through July 1995. Prior to this time, Mrs.
Pomerantz served as Executive Vice President and a
Director of Leslie Fay, from January 1993 to
November 1994, and as Senior Vice President and Vice
President of Leslie Fay from 1986 through 1992.
DIRECTORS IN CLASS II CONTINUING IN OFFICE UNTIL 2000:
DIRECTOR
NAME SINCE AGE PRINCIPAL OCCUPATION AND DIRECTORSHIPS
---- -------- --- ----------------------------------------------------
Stewart M. Kasen....... 1997 59 Mr. Kasen is currently the Chairman, President and
Chief Executive Officer of Factory Card Outlet Corp.
("Factory Cards"), and has served in this capacity
since May 1998. Factory Cards filed for protection
under chapter 11 of the United States Bankruptcy
Code in March 1999 and is developing a
reorganization plan. Mr. Kasen served as Chairman of
the Board, President, and Chief Executive Officer of
Best Products Co., Inc. ("Best Products"), a
Richmond, Virginia, retail catalogue showroom
company, from June 1994 through April 1996,
President and Chief Executive Officer from June 1991
to June 1994, and President and Chief Operating
Officer from 1989 to June 1991. Best Products filed
for protection under chapter 11 of the United States
Bankruptcy Code in January 1991. Best Products' plan
of reorganization was confirmed in June 1994, and it
filed a petition for bankruptcy under chapter 11
again on September 24, 1996. Mr. Kasen also
currently serves as a Director of Markel Corp.,
O'Sullivan Industries Holdings, Inc. and K2 Inc.
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DIRECTOR
NAME SINCE AGE PRINCIPAL OCCUPATION AND DIRECTORSHIPS
---- -------- --- ----------------------------------------------------
John A. Muskovich...... 1997 52 Mr. Muskovich has served as President and Chief
Operating Officer of Elder-Beerman since December
1997 and, in addition, served as Chief Financial
Officer from December 1997 through March 1999. He
served as Executive Vice President of Administration
of Elder-Beerman from February 1996 to December
1997. Prior to this time, Mr. Muskovich served as
Director of Business Process for Kmart Corp. from
September 1995 to February 1996; President of the
Federated Claims Services Group with Federated
Department Stores, Inc. ("Federated") from February
1992 to August 1995; Vice President of Benefits of
Federated from 1994 to 1995; and Vice President,
Corporate Controller of Federated from 1988 to 1992.
John J. Wiesner........ 1997 60 Mr. Wiesner retired from C.R. Anthony, a regional
apparel retailer, in June 1997. Prior to retirement,
Mr. Wiesner served as Chairman of the Board of
Directors, President and Chief Executive Officer of
C.R. Anthony, from April 1987 to June 1997. Mr.
Wiesner is also currently a Director of Stage
Stores, Inc. and Lamonts Apparel, Inc.
DIRECTORS IN CLASS III CONTINUING IN OFFICE UNTIL 2001:
DIRECTOR
NAME SINCE AGE PRINCIPAL OCCUPATION AND DIRECTORSHIPS
---- -------- --- ----------------------------------------------------
Steven C. Mason........ 1997 63 Mr. Mason retired from Mead Corp., a forest products
company, in November 1997. Prior to retirement, Mr.
Mason served as Chairman of the Board and Chief
Executive Officer of Mead Corp. from April 1992 to
November 1997. Mr. Mason is also currently a
Director of PPG Industries, Inc. and Convergys.
Frederick J. Mershad... 1997 56 Mr. Mershad has served as Chief Executive Officer of
Elder-Beerman since January 1997 and as President of
Elder-Beerman from January 1997 to December 1997.
Prior to this time, Mr. Mershad served as President
and Chief Executive Officer of the Proffitt's
division of Saks, Inc. ("Proffitt's") from February
1995 to December 1996; Executive Vice President,
Merchandising Stores for Proffitt's from May 1994 to
January 1995; Senior Vice President, General
Merchandise Manager, Home Store for the Rich's
Department Store Division of Federated from August
1993 to May 1994; and Executive Vice President,
Merchandising and Marketing of the McRae's
Department Stores division of Proffitt's from June
1990 to August 1993.
Jack A. Staph.......... 1997 53 Mr. Staph is currently a consultant, lawyer and
private investor. Mr. Staph has also served in an
unrestricted advisory capacity to CVS Corp. since
June 1997. Prior to this time, Mr. Staph served as
Senior Vice President, Secretary, and General
Counsel of Revco D.S., Inc., a retail pharmacy
company, from October 1972 to August 1997.
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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors oversees the business and affairs of Elder-Beerman
and monitors the performance of management. The Board met six times during 1998.
BOARD COMMITTEES
The Board of Directors has an Executive Committee, an Audit and Finance
Committee, a Compensation Committee and a Nominating and Corporate Governance
Committee. Each Committee reports to the Board of Directors at its first meeting
after the Committee meeting.
Executive Committee
During fiscal year 1998, the members of the Executive Committee were
Messrs. Mershad (Chairman), Mason, Muskovich and Staph. The Executive Committee
held no formal meetings in 1998. Except to the extent that its powers are
limited by law, by Elder-Beerman's Amended Articles of Incorporation or Amended
Code of Regulations (the "Regulations") or by the Board of Directors, during the
intervals between meetings of the Board of Directors, the Executive Committee
may exercise, subject to the control of the Board of Directors, all of the
powers of the Board of Directors in the management and control of the Company's
business. All action taken by the Executive Committee is to be reported to the
Board of Directors at its first meeting thereafter.
Audit and Finance Committee
During fiscal year 1998, the members of the Audit and Finance Committee
were Messrs. Noonan (Chairman), Kasen and Olsoff. The Audit and Finance
Committee held six formal meetings in 1998. The Audit and Finance Committee is
responsible for: (i) reviewing the professional services to be provided by the
Company's auditors and the independence of such firm from management of the
Company; (ii) reviewing the scope of the audit by the Company's independent
auditors; (iii) reviewing the annual financial statements of the Company; (iv)
reviewing and evaluating the Company's systems of internal accounting controls;
(v) reviewing and evaluating the Company's internal audit function and meeting
from time to time with the internal auditors outside the presence of other
employees; (vi) such other matters with respect to accounting, auditing and
financial reporting practices and procedures of the Company as it may find
appropriate or as may be brought to its attention; and (vii) reviewing the
Company's financing plans. The Audit and Finance Committee is also responsible
for the Company's corporate compliance program to ensure compliance with all
applicable laws.
Compensation Committee
During fiscal year 1998, the members of the Compensation Committee were
Messrs. Olsoff (Chairman), Staph and Wiesner. The Compensation Committee held
five formal meetings in 1998. The Compensation Committee is responsible for: (i)
reviewing executive salaries; (ii) approving the salaries and other benefits of
the executive officers of the Company; (iii) administering the bonus, stock
option and other incentive compensation plans of the Company, as well as the
employee stock purchase plan; and (iv) advising and consulting with the
Company's management regarding pension and other benefit plans and compensation
policies and practices of the Company.
Nominating and Corporate Governance Committee
During fiscal year 1998, the members of the Nominating and Corporate
Governance Committee were Messrs. Mershad (Chairman) and Mason and Mrs.
Pomerantz. The Nominating and Corporate Governance Committee held three formal
meetings in 1998. The Nominating and Corporate Governance Committee is
responsible for the selection, evaluation and nomination of candidates for
election to the Board of Directors. The Nominating and Corporate Governance
Committee is also responsible for recommending to the Board the members and
chair of each Board Committee. In addition, the Nominating and Corporate
Governance Committee is responsible for the process of evaluating the overall
performance of the Board of Directors and its individual members to ensure
effective operations of the Board of Directors and overall corporate governance.
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COMPENSATION OF ELDER-BEERMAN'S DIRECTORS
Compensation
Directors who are employees of Elder-Beerman do not receive any separate
fees or other remuneration for serving as a director or a member of any
Committee of the Board. For fiscal year 1998, nonemployee directors were paid a
retainer of $15,000 for their service on the Board of Directors. Nonemployee
directors were also each paid a meeting fee of $1,500 for each board meeting
attended, plus $500 for each committee meeting attended. Nonemployee directors
may elect to take their annual retainer as cash or in the form of discounted
stock options.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
None of the members of the Compensation Committee was or ever has been an
officer or employee of Elder-Beerman or engaged in transactions with
Elder-Beerman (other than in his capacity as a director). None of Elder-
Beerman's executive officers serves as a director or member of the compensation
committee of another entity, one of whose executive officers serves as a member
of the Compensation Committee or a director of Elder-Beerman.
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11
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS
The Company's Common Stock is the only outstanding class of voting
securities. The following table sets forth information regarding ownership of
our Common Stock as of April 22, 1999 (except as otherwise noted) by: (a) each
person who owns beneficially more than 5% of Common Stock of the Company to the
extent known to management, (b) each executive officer and director of the
Company, and (c) all directors and executive officers as a group. Except as
noted, all information with respect to beneficial ownership has been furnished
by each director or officer or is based on filings with the Securities and
Exchange Commission.
AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF CLASS
---------------- ----------------------- --------
Snyder Capital Management, Inc.............................. 1,696,950(2) 10.80
350 California Street, Suite 460
San Francisco, CA 94104
Lord, Abbett & Co........................................... 1,227,989(3) 7.81
767 Fifth Avenue
New York, NY 10153
Lazard Freres & Co. LLC..................................... 789,100(4) 6.22
30 Rockefeller Plaza
New York, NY 10020
Mellon Bank Corporation..................................... 955,900(5) 6.07
One Mellon Bank Center
Pittsburgh, PA 15258
Whippoorwill Associates, Inc................................ 829,034(6) 5.30
11 Martine Avenue
White Plains, NY 10606
PPM America, Inc............................................ 786,765(7) 5.003
225 West Wacker Drive, Suite 1100A
Chicago, IL 60606
Stewart M. Kasen............................................ 7,737(8) *
Steven C. Mason............................................. 8,414(8) *
Frederick J. Mershad........................................ 242,128(8) 1.51
John A. Muskovich........................................... 152,828(8) *
Thomas J. Noonan, Jr........................................ 6,576(8) *
Bernard Olsoff.............................................. 6,576(8) *
Laura H. Pomerantz.......................................... 14,414(8)(9) *
Jack A. Staph............................................... 6,976(8) *
John J. Wiesner............................................. 5,962(8) *
James M. Zamberlan.......................................... 28,038(8) *
Scott J. Davido............................................. 10,398(8) *
Steven D. Lipton............................................ 5,131(8) *
- -------------------------------------------------------------------------------------------------
All directors and executive officers as a group (12
persons):................................................. 495,178 3.09%
- ---------------
* less than 1%
8
12
(1) Information about beneficial ownership is based on information furnished to
the Company by each shareholder included in this table. "Beneficial
ownership" is a technical term broadly defined by the Securities and
Exchange Commission to mean more than ownership in the usual sense. So, for
example, you not only "beneficially" own the Elder-Beerman Common Stock that
you hold directly, but also the Elder-Beerman Common Stock that you
indirectly (through a relationship, a position as a director or trustee, or
a contract or understanding), have (or share) the power to vote or sell or
that you have the right to acquire within 60 days.
(2) Snyder Capital Management, Inc. ("SCMI") is the general partner of Snyder
Capital Management, L.P. ("SCMLP"), a registered investment advisor. SCMI
and SCMLP reported the beneficial ownership (as of February 28, 1999) of
such shares in a Schedule 13G dated March 3, 1999.
(3) Lord, Abbett & Co. reported the beneficial ownership (as of December 31,
1998) of such shares in a Schedule 13G dated February 12, 1999.
(4) Lazard Freres & Co. LLC reported the beneficial ownership (as of December
31, 1998) of such shares in a Schedule 13G dated February 16, 1999.
(5) Mellon Bank reported the beneficial ownership (as of December 31, 1998) of
such shares in a Schedule 13G dated January 29, 1999.
(6) Whippoorwill Associates, Inc. ("Whippoorwill"), in its capacity as
investment advisor, reported the beneficial ownership (as of December 31,
1998) of such shares in a Schedule 13G dated February 16, 1999. Whippoorwill
disclaims beneficial ownership of such shares.
(7) PPM America, Inc. ("PPM"), a registered investment advisor, reported the
beneficial ownership (as of February 11, 1999) of such shares in a Schedule
13G dated February 22, 1999. All such shares are held in portfolios of PPM
America Special Investments Fund, L.P. ("SIF I") and PPM America Special
Investments CBO II, L.P. ("CBO II"). PPM serves as investment advisor to
both SIF I and CBO II. PPM, PPM America CBO II Management Company (general
partner of CBO II) and PPM American Fund Management GP, Inc. (general
partner of SIF I) disclaim beneficial ownership of all such shares.
(8) These amounts include shares of Common Stock that the following persons had
a right to acquire within 60 days after January 31, 1999.
STOCK OPTIONS EXERCISABLE
NAME BY APRIL 1, 1999
---- -------------------------
Mr. Kasen............................................... 2,334
Mr. Mason............................................... 6,011
Mr. Mershad............................................. 53,800
Mr. Muskovich........................................... 31,200
Mr. Noonan.............................................. 4,173
Mr. Olsoff.............................................. 4,173
Mrs. Pomerantz.......................................... 6,011
Mr. Staph............................................... 4,173
Mr. Wiesner............................................. 3,559
Mr. Zamberlan........................................... 15,200
Mr. Davido.............................................. 4,200
Mr. Lipton.............................................. 4,200
(9) Includes 1,000 shares of Common Stock with shared voting or investment
power.
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COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY OF EXECUTIVE COMPENSATION
The table below shows the before-tax compensation for the years shown for
Elder-Beerman's Chief Executive Officer and the four next highest paid executive
officers (the "Named Executive Officers") at the end of fiscal year 1998.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
-------------------------------- ---------------------------------
AWARDS PAYOUTS
----------------------- -------
SECURITIES
OTHER RESTRICTED UNDERLYING ALL
ANNUAL STOCK OPTIONS/ LTIP OTHER
NAME AND SALARY BONUS COMPENSATION AWARD(S) SARS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($)(2) ($) (#) ($) ($)(7)(8)
------------------ ---- ------- ------- ------------ ---------- ---------- ------- ------------
Frederick J. Mershad....... 1998 559,263 120,000 29,403 1,050,000 75,000 9,970
Chairman and 1997 503,344 500,000 51,251 683,703 194,000
Chief Executive Officer 1996 19,321 633,632 0 0
John A. Muskovich.......... 1998 412,207 85,000 473,127(3) 30,000 9,950
President, Chief 1997 267,335 598,750 505,325 126,000
Operating Officer and 1996 183,974 67,908 0 0
Chief Financial Officer
James M. Zamberlan......... 1998 278,803 79,650 234,892(4) 15,000 8,050
Executive Vice 1997 139,944 41,313 20,386 61,000
President -- Stores 1996
Scott J. Davido............ 1998 174,076 21,280 26,626 26,599(5) 0 4,585
Senior Vice President -- 1997 15,935 27,500(1) 3,124 21,000
General Counsel and 1996
Secretary
Steven D. Lipton........... 1998 154,976 21,132 26,412(6) 0 7,985
Senior Vice President -- 1997 132,897 19,763 26,699 21,000
Controller 1996 103,143 45,820 0 0
- ---------------
(1) Includes a $25,000 signing bonus paid in fiscal year 1997.
(2) Moving expense reimbursement.
(3) Includes 4,755 deferred shares and 1,189 restricted shares awarded to Mr.
Muskovich as the deferred portion of his 1998 bonus pursuant to the Equity
and Performance Incentive Plan.
(4) Includes 2,228 deferred shares and 557 restricted shares awarded to Mr.
Zamberlan as the deferred portion of his 1998 bonus pursuant to the Equity
and Performance Incentive Plan.
(5) Includes 2,381 deferred shares and 595 restricted shares awarded to Mr.
Davido as the deferred portion of his 1998 bonus pursuant to the Equity and
Performance Incentive Plan.
(6) Includes 2,364 deferred shares and 591 restricted shares awarded to Mr.
Lipton as the deferred portion of his 1998 bonus pursuant to the Equity and
Performance Incentive Plan.
(7) Includes life insurance premium payments paid by the Company in 1998 in the
following amounts: Mr. Mershad $6,570, Mr. Muskovich $6,550, Mr. Zamberlan
$6,550, Mr. Davido $4,585 and Mr. Lipton $4,585.
(8) Includes matching contributions paid by the Company in 1998 under the
Company's Retirement Savings Plan in the following amounts: Mr. Mershad
$3,400, Mr. Muskovich $3,400, Mr. Zamberlan $1,500 and Mr. Lipton $3,400.
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STOCK OPTIONS
The following table sets forth information concerning stock option grants
made to the Named Executive Officers during fiscal year 1998 pursuant to The
Elder-Beerman Stores Corp. Equity and Performance Incentive Plan (the "Plan").
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
-------------------------------------------------------
NUMBER OF PERCENT OF POTENTIAL REALIZABLE VALUE
SECURITIES TOTAL AT ASSUMED ANNUAL RATE OF
UNDERLYING OPTIONS/SARS STOCK PRICE APPRECIATION
OPTIONS/SARS GRANTED TO EXERCISE FOR OPTION TERM
GRANTED EMPLOYEES IN OF BASE EXPIRATION -----------------------------
NAME (#)(1) FISCAL YEAR PRICE($/SH) DATE 0%($) 5%($) 10%($)
---- ------------- ------------ ----------- ---------- ----- -------- ----------
Frederick J. Mershad......... 75,000 45.45 $21.00 3/11/08 $0.00 $990,509 $2,510,144
John A. Muskovich............ 30,000 18.18 $21.00 3/11/08 $0.00 $396,204 $1,004,058
James M. Zamberlan........... 15,000 9.09 $21.00 3/11/08 $0.00 $198,102 $ 502,029
- ---------------
(1) Options vest one-fifth annually, beginning one year from date of grant.
STOCK OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth information about stock options exercised
during fiscal year 1998 by the Named Executive Officers and the fiscal year-end
value of unexercised options held by the Named Executive Officers. All of such
options were granted under the Plan.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARS HELD AT OPTIONS/SARS HELD AT
ACQUIRED VALUE JANUARY 30, 1999 (#) JANUARY 30, 1999($)(1)
ON REALIZED --------------------------- ---------------------------
NAME EXERCISE(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
Frederick J. Mershad................. 0 $0.00 38,800 230,200 $0.00 $0.00
John A. Muskovich.................... 0 $0.00 25,200 130,800 $0.00 $0.00
James M. Zamberlan................... 0 $0.00 12,200 63,800 $0.00 $0.00
Scott J. Davido...................... 0 $0.00 4,200 16,800 $0.00 $0.00
Steven D. Lipton..................... 0 $0.00 4,200 16,800 $0.00 $0.00
- ---------------
(1) Based on the closing price on NASDAQ of the Company's Common Stock on
January 29, 1999 (the last trading day in fiscal year 1998) of $8.938.
EMPLOYMENT AND SEVERANCE AGREEMENTS WITH CERTAIN OFFICERS
The Company has entered into employment agreements with Frederick J.
Mershad, Chairman and Chief Executive Officer, and John A. Muskovich, President
and Chief Operating Officer, and several of its other executive officers as
described below (the "Employment Agreements"). These Employment Agreements set
forth (a) the executive's compensation and benefits, subject to increases at the
discretion of the Board of Directors, (b) the Company's right to terminate the
executive for cause or otherwise; (c) the amounts to be paid by the Company in
the event of the executive's termination, death, or disability while rendering
services; (d) the executive's duty of strict confidence and to refrain from
conflicts of interest; (e) the executive's obligations not to compete for the
term of the agreement plus one year unless the executive terminated his
employment for good reason or the employer terminates the executive other than
for cause; and (f) the executive's right to receive severance payments. In
general, these Employment Agreements provide that if Mr. Mershad or Mr.
Muskovich is terminated for any reason other than for cause or following a
"change in control" (as defined in the Employment
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Agreements), he will receive payments equal to the remaining base salary that
would have been distributed to him by the Company under the remaining term of
his Employment Agreement and the incentive compensation earned by the executive
for the most recent fiscal year. If such executive (a) is terminated within two
years of a change in control without cause, (b) voluntarily terminates within
two years of a change in control, or (c) is terminated in connection with but
prior to a change in control and termination occurs following the commencement
of any discussions with any third party that ultimately results in a change in
control, he will receive a severance payment equal to the greater of 2.99 times
the Internal Revenue Code "base amount" as described in Section 280G of the
Internal Revenue Code or two times his most recent base salary and bonus and the
executive will continue to be eligible for health benefits, perquisites, and
fringe benefits generally made available to senior executives following his
termination, unless the executive obtains new employment providing substantially
similar benefits. A tax gross-up on excise taxes also will be paid if the
severance pay exceeds the limits imposed by the Internal Revenue Code.
The Company has also entered into Employment Agreements that include
severance pay provisions with each of Messrs. Zamberlan, Davido and Lipton.
These Employment Agreements set forth (a) the executive's compensation and
benefits, subject to review at the discretion of the Board of Directors, (b) the
Company's right to terminate the executive for cause or otherwise; (c) the
amounts to be paid by the Company in the event of the executive's termination,
death, or disability while rendering services; (d) the executive's duty of
strict confidence and to refrain from conflicts of interest; (e) the executive's
obligations not to compete for the term of the agreement plus one year unless
the executive terminated his employment for good reason or the employer
terminates the executive other than for cause; and (f) the executive's right to
receive severance payments if he (i) is terminated within two years of a change
in control without cause, (ii) voluntarily terminates for defined good reasons
within two years of a change of control, (iii) terminates his employment for any
reason, or without reason, during the thirty-day period immediately following
the first anniversary of a change in control, or (iv) is terminated in
connection with but prior to a change in control and termination occurs
following the commencement of any discussions with any third party that
ultimately results in a change in control. Specifically, under the Employment
Agreements, the amount of any severance payment by the Company will be the
greater of 2.99 times the Internal Revenue Code "base amount" as described in
Section 280G of the Internal Revenue Code or two times his most recent base
salary and bonus. Severance payments made under the Employment Agreements will
reduce any amounts that would be payable under any other severance plan or
program, including the master severance plan for certain key employees. A tax
gross-up on excise taxes also will be paid if the severance pay exceeds the
limit imposed by the Internal Revenue Code. In addition, the executive will
continue to be eligible for health benefits, perquisites, and fringe benefits
generally made available to senior executives for two years following his
termination, unless the executive waives such coverage, fails to pay any amount
required to maintain such coverage, or obtains new employment providing
substantially similar benefits.
The Company has also entered into Indemnification Agreements with each
current member of the Board of Directors as well as each of the Company's
executive officers. These agreements provide that, to the extent permitted by
Ohio law, the Company will indemnify the director or officer against all
expenses, costs, liabilities and losses (including attorneys' fees, judgments,
fines or settlements) incurred or suffered by the director or officer in
connection with any suit in which the director or officer is a party or is
otherwise involved as a result of the individual's service as a member of the
Board of Directors or as an officer so long as the individual's conduct that
gave rise to such liability meets certain prescribed standards.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW AND PHILOSOPHY
The Compensation Committee of the Board (the "Committee") has
responsibility for setting and administering the policies that govern executive
compensation. The Committee has authority, among other things, to review,
analyze and recommend compensation programs to the Board of Directors and to
administer and grant awards under the Company's Equity and Performance Incentive
Plan (the "Plan"). The Committee is composed entirely of outside directors.
Reports of the Committee's actions and decisions are recommended to the full
Board. The purpose of this report is to summarize the philosophical principles,
specific program objectives and
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other factors considered by the Committee in reaching its determination
regarding the executive compensation of the Chief Executive Officer and the
Company's executive officers.
The Committee's goal is to ensure the establishment and administration of
executive compensation policies and practices that will enable Elder-Beerman to
attract, retain and motivate the management talent necessary to achieve the
Company's goals and objectives. The Committee's philosophy is that executive
compensation should include the following:
- A competitive mix of short-term (base salary and annual incentive bonus)
and long-term (stock options and restricted and deferred shares)
compensation that helps the Company attract and retain executive talent.
- Cash compensation that generally reflects competitive industry levels,
with annual incentive bonus opportunities that may produce total
compensation at or above competitive levels if performance against
predetermined objectives exceeds expectations.
- Opportunities for ownership of Elder-Beerman's common stock (the "Common
Stock") that align the interests of Company executives with the long-term
interests of shareholders.
The Company's executive compensation is comprised primarily of (i)
salaries, (ii) annual cash incentive bonuses and (iii) long-term incentive
compensation in the form of stock options, deferred shares and restricted shares
granted under the Plan. Each year the Committee reviews market data and assesses
the Company's competitive position for each of these three components. To assist
in benchmarking the competitiveness of its compensation programs, the Committee
retains a third-party consultant to compile an executive compensation survey for
comparably sized retail companies. Because the Committee believes that
compensation in the retail industry is more directly tied to the size of
enterprise than the type of retail business, these surveys include comparably
sized retailers outside of the department store business. Each of the components
of executive compensation is discussed below.
COMPONENTS OF COMPENSATION
BASE SALARY
Base salaries for Company executives were initially established in each of
the executive's employment agreements, which were approved pursuant to the Third
Amended Joint Plan of Reorganization, as modified (the "Plan of Reorganization")
of the Company, confirmed by an order entered by the United States Bankruptcy
Court for the Southern District of Ohio on December 16, 1997. The Committee
reviews base salaries annually and makes adjustments on the basis of the
performance of both the individual executive and the Company, the executive's
level of responsibility in the Company, the executive's importance to the
Company and the general level of executive compensation in the retail industry.
The base salaries and increases in the base salaries of the Company's executive
officers (other than the Chief Executive Officer) are reviewed and approved by
the Committee after considering recommendations made by the Chief Executive
Officer in light of the criteria discussed above.
ANNUAL BONUS
- GENERAL PARAMETERS
Annual bonus awards are designed to promote the achievement of the
Company's business objectives. In setting each year the bonus award targets that
the Company must meet before it can make any bonus payments, the Committee
considers the Company's prior year's performance and objectives, as well as its
expectations for the upcoming year. Additionally, individual performance goals
are established for each participant. Bonus program participants receive no
payments unless minimum thresholds are achieved.
Bonus targets are fixed as a percentage of annual salary based on
comparable incentives paid by other retail companies. Target bonus percentages
for the executive officers ranged from 35% to 50%. The target percentage
increases with the level of responsibility of the executive. Bonus payments may
range from 0% to 150% of the target annual bonus, with payments increasing as
performance improves.
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- DEFERRED SHARES AND RESTRICTED SHARES
An executive may elect to defer up to 50% of his annual bonus in the form
of deferred shares. Deferred shares are subject to a deferral period of three
years, which is accelerated in the event of death, permanent disability,
termination of employment, or change of control of Elder-Beerman. Holders of
deferred shares do not have voting rights for their deferred shares, but the
terms of the deferred shares may provide for dividend equivalents. The Company
matches 25% of the deferred shares in restricted shares.
Restricted shares typically vest in three years from the date of grant,
which is accelerated in the event of death, permanent disability, or a change of
control of Elder-Beerman. Prior to vesting, restricted shares are forfeitable
upon termination of employment. The restricted shares provide for dividend
equivalents and voting rights.
The deferred shares and restricted shares are granted to executives in
accordance with the Plan.
- 1998 BONUS OBJECTIVES
Annual bonuses for 1998 were based on meeting weighted objectives for the
following measurements:
- Corporate operating profit;
- Financial goals in the applicable executive's area of responsibility; and
- Individual performance goals for the applicable executive.
For 1998, the Company achieved less than the target award level established
for operating profit, which allowed the Company to pay only 40% of the target
amount for that bonus component of annual compensation. Many executives were
able to achieve some or all of their respective area of responsibility and
individual performance goals, which resulted in each executive earning in total
between 50% and 60% of his respective target bonus amounts.
LONG-TERM INCENTIVE AWARDS
- STOCK OPTIONS, DEFERRED SHARES AND RESTRICTED SHARES
The Committee administers the Plan, which provides for long-term incentives
to executive officers in the form of stock options, deferred shares and
restricted shares. The awards of stock options and deferred shares provide
compensation to executives only if shareholder value increases. To determine the
number of stock options, deferred shares and restricted shares awarded, the
Committee reviews a survey prepared by a third-party consultant of awards made
to individuals in comparable positions at other retail companies and the
executive's past performance, as well as the number of long-term incentive
awards previously granted to the executive. The deferred shares and restricted
shares are subject to the terms and conditions described above.
EXECUTIVE PLAN
At the beginning of fiscal year 1999, the Committee adopted a long-term
incentive award plan (the "Executive Plan") for Mr. Mershad, its Chief Executive
Officer, and Mr. Muskovich, its Chief Operating Officer. This plan consists of
performance-based restricted shares and premium priced stock options. This plan
was developed to achieve two key objectives:
- Create strong incentives that will drive shareholder value and
- Create a retention mechanism for the top two officers of the Company.
To establish benchmarks for a competitive long-term incentive plan for
Messrs. Mershad and Muskovich, the Committee engaged a third-party consultant to
conduct an analysis of executive compensation at 12 peer retail companies. The
Committee then reviewed the current compensation packages of Messrs. Mershad and
Muskovich. Finally, the Committee evaluated the Company's 1998 performance and
future performance objectives. Bearing in mind these factors and the two key
objectives for the Executive Plan, the Committee formulated the amounts of
restricted shares and stock options to be granted under the Executive Plan to
Messrs. Mershad and Muskovich and the earnings per share and stock price targets
that must be met for Messrs. Mershad and Muskovich to earn their respective
awards. Pursuant to the terms of the Executive Plan, any
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restricted shares granted to Messrs. Mershad and Muskovich will vest at the end
of three years only if the Company meets target earnings per share levels. The
premium price stock options will vest over a period of five years and the
vesting is not contingent on performance goals.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The base salary and increases in the base salary of the Chief Executive
Officer are reviewed annually and approved by the Committee and the nonemployee
members of the Board of Directors after review of the Chief Executive Officer's
performance against predetermined performance criteria set by the nonemployee
Directors. Under the terms of Mr. Mershad's employment agreement, which was
approved pursuant to the Plan of Reorganization, his annual salary was initially
established at $500,000.
1998 BASE SALARY AND ANNUAL BONUS
On March 11, 1998, the Committee increased Mr. Mershad's annual base salary
to $600,000, an increase of 20% from his prior level. Mr. Mershad is also
eligible for an annual bonus of up to 50% of his base salary. Mr. Mershad's
bonus is determined in the same manner described above for the executive
officers. For fiscal year 1998, Mr. Mershad's bonus was $120,000.
LONG-TERM INCENTIVE AWARDS
In March 1998, as part of his long-term compensation for fiscal year 1998,
Mr. Mershad was granted 50,000 restricted shares and options to purchase 75,000
shares of Elder-Beerman stock at $21.00 per share. The restricted shares and
stock options were granted pursuant to the Plan. The restricted shares vest
one-third annually beginning February 1, 1999 and are otherwise subject to the
same terms as those granted to the executive officers. One-fifth of the stock
options vest annually, beginning one year from the date of grant. The Committee
determined the number of restricted shares and stock options granted to Mr.
Mershad based in part on its review of the compensation survey prepared by the
third-party consultant, which set forth awards made to chief executive officers
at comparably-sized retail companies. The Committee also reviewed the
performance of Mr. Mershad during the fiscal year.
EXECUTIVE PLAN
Pursuant to the Executive Plan, the Committee established a stock ownership
goal of Elder-Beerman Common Stock worth 200% of Mr. Mershad's base salary. In
February 1999, Mr. Mershad was granted 75,000 restricted shares and options to
purchase 300,000 shares of Elder-Beerman stock under the Executive Plan. The
restricted shares granted to Mr. Mershad will vest at the end of three years
only if the Company meets target earnings per share levels. The premium price
stock options will vest over a period of five years and the vesting is not
contingent on performance goals. At the date of the grant approximately
one-third of the options had an exercise price equal to the then-current stock
price. The remaining two-thirds of the options were set with exercise prices of
20% to 40% above current market price.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Under Section 162(m) of the Internal Revenue Code, the Company is precluded
from deducting compensation in excess of $1 million per year paid to each of the
Chief Executive Officer and the four next highest paid executive officers (the
"Named Executive Officers"). Qualified performance-based compensation is
excluded from this deduction limitation if certain requirements are met. The
Plan is designed to permit (but not require) the Committee to grant awards that
will qualify as performance-based compensation that is excluded from the
limitation in Section 162(m). The Committee believes that Section 162(m) should
not cause the Company to be denied a deduction for 1998 compensation paid to the
Named Executive Officers. The Committee will work to structure components of its
executive compensation package to achieve maximum deductibility under Section
162(m) while at the same time considering the goals of its executive
compensation policies.
The foregoing is the report of the Compensation Committee of the Board of
Directors.
Bernard Olsoff
Jack A. Staph
John J. Wiesner
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STOCK PRICE PERFORMANCE
The following graph depicts the value of $100 invested in Elder-Beerman
Common Stock (trading symbol "EBSC") beginning February 17, 1998 (the first
trading day of the Common Stock) through January 30, 1999 (the last day of the
Company's fiscal year). Comparisons are made to:
1. The Standard & Poor's SmallCap 600 Index, a market-value weighted index
of 600 domestic companies with an average equity market value of
approximately $400 million.
2. A Regional Department Store Peer Group, consisting of The Bon-Ton
Stores, Inc., Stage Stores, Inc., Gottschalks Inc., and Jacobson Stores
Inc. The return for this group was calculated assuming an equal dollar
amount was invested in each retailer's stock based on closing prices as
of February 17, 1998.
REGIONAL DEPT. STORE PEER
S&P SMALLCAP 600 INDEX GROUP INDEX EBSC
---------------------- ------------------------- ----
Feb 17 100 100 100
May 2 107 116 165
Aug 1 93 91 140
Oct 31 84 57 71
Jan 30 93 59 54
REGIONAL
S&P DEPT STORE
SMALLCAP PEER GROUP
QUARTER-END 600 INDEX INDEX EBSC
----------- --------- ---------- ----
February 17, 1998.............................. 100 100 100
May 2, 1998.................................... 107 116 165
August 1, 1998................................. 93 91 140
October 31, 1998............................... 84 57 71
January 30, 1999............................... 93 59 54
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ITEM NO. 2
AMENDMENT TO CODE OF REGULATIONS
The second proposal to be acted upon at the Annual Meeting is a proposal to
amend Elder-Beerman's Regulations. Shareholders are being asked to approve and
adopt an amendment to Section 2 of the Regulations so that the annual meeting of
shareholders is not required to be held during the month of May. The Company's
Board of Directors unanimously approved the amendment on February 25, 1999 and
recommends that the shareholders approve the amendment.
Section 2 of the Company's Regulations currently requires that the annual
meeting of shareholders be held in May of each year. The amendment to Section 2
of the Regulations has been proposed so that the Company will have more
flexibility in the timing of its annual meeting. The amendment does not in any
way modify the rights of any shareholder.
The Board of Directors recommends that you vote FOR the proposal to amend
the Regulations. Approval of the amendment requires the affirmative vote of the
holders of a majority of shares of Common Stock present or represented, and
entitled to vote on the matter at the Annual Meeting.
The full text of the proposed amendment is set forth below:
"2. Annual Meeting. Commencing with the year 1999, an annual meeting of
the shareholders will be held on such date and at such time as may be
designated by the Board of Directors, at which meeting the shareholders
will elect directors to succeed those directors whose terms expire at
such meeting and will transact such other business as may be brought
properly before the meeting in accordance with Regulation 7."
The Company will provide a complete copy of its Regulations without charge
upon written request by a shareholder. Requests should be directed to us at 3155
El-Bee Road, Dayton, Ohio 45439, Attention: Secretary.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors
and executive officers and persons who own more than 10 percent of a registered
class of our equity securities to file reports of ownership on Forms 3, 4 and 5
with the Securities and Exchange Commission. The Securities and Exchange
Commission requires this group to furnish us with copies of all such filings. We
periodically remind this group of its reporting obligation and assist in making
the required disclosure once we are notified that a reportable event has
occurred. We are required to disclose in this Proxy Statement any failure by any
of the above mentioned persons to make timely Section 16 reports.
Based upon its review of such forms received by Elder-Beerman and written
representations from the directors and executive officers that no other reports
were required, Elder-Beerman is unaware of any instances of noncompliance, or
late compliance, with such filings during fiscal year 1998 by its directors,
executive officers or 10 percent shareholders.
INDEPENDENT AUDITORS
In February, 1998, Deloitte & Touche LLP was appointed by the Board of
Directors of the Company, on the recommendation of the Audit and Finance
Committee, as the Company's independent auditors for the fiscal year ended
January 30, 1999. Representatives of Deloitte & Touche are expected to be
present at the Annual Meeting and will have the opportunity to make a statement
if they so desire. They are expected to be available to respond to proper
questions regarding the independent auditors' responsibilities.
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SUBMISSION OF SHAREHOLDER PROPOSALS
Pursuant to our Regulations, for any shareholder proposal to be eligible
for inclusion in our proxy statement and form of proxy for our next annual
meeting, the proposals must be received at our executive offices not less than
60 nor more than 90 calendar days prior to the date of next year's annual
meeting. If public notice of the date of the annual meeting is not given at
least 105 days prior to the annual meeting, submissions must be delivered to
Elder-Beerman no later than 10 days following the public announcement of the
meeting date. Such proposals should be submitted by certified mail, return
receipt requested, addressed to us at 3155 El-Bee Road, Dayton, Ohio 45439,
Attention: Secretary.
OTHER MATTERS
The Board of Directors knows of no other matters that are likely to be
brought before the Annual Meeting, but if other matters do properly come before
the meeting, the proxies, or their substitutes, will vote the proxy in
accordance with their best judgment.
The Company's 1998 Annual Report, including financial statements, has been
mailed along with this Proxy Statement.
------------------------
It is important that the proxies be returned promptly. If you do not plan
to attend the meeting, we urge you to fill out, date and mail the enclosed proxy
in the enclosed envelope, which requires no postage if mailed in the United
States.
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[LOGO] ELDER-BEERMAN
THE ELDER-BEERMAN STORES CORP.
ANNUAL MEETING OF SHAREHOLDERS
FRIDAY, MAY 28, 1999
8:00 A.M.
ELDER-BEERMAN DAYTON MALL STORE
2700 STATE ROUTE 725
DAYTON, OHIO 45459
[LOGO] ELDER-BEERMAN
THE ELDER-BEERMAN STORES CORP.
3155 EL-BEE ROAD, DAYTON, OHIO 45439 PROXY
- --------------------------------------------------------------------------------
This proxy is solicited by the Board of Directors for use at the Annual Meeting
on Friday, May 28, 1999.
The shares of stock you hold in your account will be voted as you specify on
this card.
If no choice is specified, the proxy will be voted "FOR" Items 1 and 2.
By signing the proxy, you revoke all prior proxies and appoint each of John A.
Muskovich and Scott J. Davido with full power of substitution, to vote your
shares on matters shown on the reverse side and any other matters that may come
before the Annual Meeting and all adjournments.
See reverse for voting instructions.
23
* Please detach here *
- --------------------------------------------------------------------------------
SHARE AMOUNTS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
1. Election of directors 01 Thomas J. Noonan, Jr 02 Bernard Olsoff [ ] Vote FOR [ ] Vote WITHHELD
03 Laura H. Pomerantz all nominees from all nominees
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDICATED NOMINEE, -------------------------------------------
WRITE THE NUMBER(S) OF THE NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.) -------------------------------------------
2. Proposal #2 Amendment to Code of Regulations [ ] For [ ] Against [ ] Abstain
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED
FOR EACH PROPOSAL.
Attending the Annual Meeting? Mark Box [ ]
Address change? Mark Box [ ]
Indicate changes below: Date___________________________________
[ ]
Signature(s) in Box
Please sign exactly as your name(s) appears
on Proxy. If held in joint tenancy, all
persons must sign. Trustees,
"administrators, etc., should include title
and authority. Corporations should provide
full name of corporation and title of
authorized officer signing the proxy.