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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
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The Men's Wearhouse, Inc.[ ] Preliminary Proxy Statement.
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THE MEN'S WEARHOUSE, INC.
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CONTROL NUMBER.
SEC 1913 (11-01)
THE MEN'S WEARHOUSE, INC.
5803 GLENMONT DRIVE
HOUSTON, TEXAS 77081-1701
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 25, 2002JULY 1, 2003
Notice is hereby given that the Annual Meeting of the Shareholders of The
Men's Wearhouse, Inc., a Texas corporation (the "Company"), will be held at
11:00 a.m., pacific daylight time, on Tuesday, June 25, 2002,July 1, 2003, at The Westin St.
Francis, 335 Powell Street, San Francisco, California, for the following
purposes:
(1) To elect six directors of the Company to hold office until the
next Annual Meeting of Shareholders or until their respective successors
are duly elected and qualified;
(2) To consider and act upon a proposal regarding a code of conduct
based on the United Nation's International Labor Organization's Standards
for Workers Rights;
(3) To ratify the appointment by the Board of Directors of the firm of
Deloitte & Touche LLP as independent auditors for the Company for Fiscal
2002;2003; and
(4) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The holders of record of the Company's common stock, $.01 par value, at the
close of business on May 8, 2002,14, 2003, will be entitled to vote at the meeting and
any adjournment(s) thereof.
By Order of the Board of Directors
/s/ MICHAEL-s- Michael W. CONLONConlon
Michael W. Conlon
Secretary
May 24,30, 2002
IMPORTANT
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. EVEN IF YOU PLAN
TO BE PRESENT, YOU ARE URGED TO SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY.
IF YOU ATTEND THE MEETING YOU CAN VOTE EITHER IN PERSON OR BY YOUR PROXY.
THE MEN'S WEARHOUSE, INC.
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 25, 2002JULY 1, 2003
This proxy statement is furnished to the shareholders of The Men's
Wearhouse, Inc. (the "Company"), whose principal executive offices are located
at 5803 Glenmont Drive, Houston, Texas 77081-1701, and at 40650 Encyclopedia
Circle, Fremont, California 94538-2453, in connection with the solicitation by
the Board of Directors of the Company of proxies to be used at the Annual
Meeting of Shareholders to be held at 11:00 a.m., pacific daylight time, on
Tuesday, June 25, 2002,July 1, 2003, at The Westin St. Francis, 335 Powell Street, San
Francisco, California, or any adjournment(s) thereof (the "Annual Meeting").
Proxies in the form enclosed, properly executed by shareholders and
received in time for the meeting, will be voted as specified therein. If a
shareholder does not specify otherwise, the shares represented by his or her
proxy will be voted "FOR" the nominees for director listed therein, "AGAINST"
the proposal regarding a code of conduct based on the United Nation's
International Labor Organization's Standards for Workers Rights and "FOR"
ratification of the appointment of the Company's independent auditors. The
giving of a proxy does not preclude the right to vote in person should the
person giving the proxy so desire, and the proxy may be revoked at any time
before it is exercised by written notice delivered to the Company at or prior to
the meeting.
This Proxy Statement is being mailed on or about May 24, 2002,30, 2003, to the
holders of record of Common Stock on May 8, 200214, 2003 (the "Record Date"). At the
close of business on the Record Date, there were outstanding and entitled to
vote 42,477,44239,585,591 shares of the Company's common stock, $.01 par value (the
"Common Stock"), and only the holders of record on such date shall be entitled
to vote at the Annual Meeting. Such holders will be entitled to one vote per
share on each matter presented at the Annual Meeting.
The enclosed form of proxy provides a means for shareholders to vote for
all of the nominees listed therein, to withhold authority to vote for one or
more of such nominees or to withhold authority to vote for all of such nominees.
The withholding of authority by a shareholder will have no effect on the results
of the election of those directors for whom authority to vote is withheld
because the Company's bylaws provide that directors are elected by a plurality
of the votes cast.
The holders of a majority of the total shares of Common Stock issued and
outstanding on the Record Date, whether present in person or represented by
proxy, will constitute a quorum for the transaction of business at the Annual
Meeting. Abstentions are counted toward the calculation of a quorum, but are not
treated as either a vote for or against a proposal. An abstention has the same
effect as a vote against a proposal or, in the case of the election of
directors, as shares to which voting power has been withheld. Under Texas law,
any unvoted position in a brokerage account with respect to any matter will be
considered as not voted and will not be counted toward fulfillment of quorum
requirements as to that matter. The shares held by each shareholder who signs
and returns the enclosed form of proxy will be counted for purposes of
determining the presence of a quorum at the meeting.
The affirmative vote of the holders of a majority of the shares of Common
Stock represented in person or by proxy at the Annual Meeting is required to
approve the proposal regarding a code of conduct based on the United Nation's
International Labor Organization's Standards for Workers Rights and to ratify
the appointment of the Company's independent auditors.
ELECTION OF DIRECTORS
At the Annual Meeting, six directors constituting the entire Board of
Directors are to be elected. All directors of the Company hold office until the
next annual meeting of shareholders or until their respective successors are
elected and qualified or their earlier resignation or removal.
The Board of Directors has concluded that it would be appropriate for the
majority of the directors of the Company to be individuals who are not and have
not been employed by the Company. Accordingly, Messrs. Robert Zimmer, James
Zimmer, Richard Goldman and Stephen Greenspan have agreed not to stand for
re-election and the following persons have been nominated to fill the six positions to be
elected by the shareholders. It is the intention of the persons named in the
enclosed proxy to vote the proxies for the election of the nominees named below,
unless otherwise specified. Management of the Company does not contemplate that
any of the nominees will become unavailable for any reason, but if that should
occur before the meeting, proxies will be voted for another nominee, or other
nominees, to be selected by management.
DIRECTOR
NAME AGE POSITION WITH THE COMPANY SINCE
- ---- --- ------------------------- --------
George Zimmer................. 5354 Chairman of the Board and Chief Executive Officer 1974
David H. Edwab................ 4748 Vice Chairman of the Board 1991
Rinaldo S. Brutoco............ 5556 Director 1992
Michael L. Ray, Ph.D. ........ 6364 Director 1992
Sheldon I. Stein.............. 4849 Director 1995
Kathleen Mason................ 5253 Director 2001
George Zimmer together with Robert E. Zimmer and Harry M. Levy, foundedco-founded The Men's Wearhouse as a partnership in 1973 and
has served as Chairman of the Board of the Company since its incorporation in
1974. George Zimmer served as President from 1974 until February 1997 and has
served as Chief Executive Officer of the Company since 1991.
David H. Edwab joined the Company in February 1991 and was elected Senior
Vice President, Treasurer and Chief Financial Officer of the Company. In
February 1993, he was elected Chief Operating Officer of the Company. In
February 1997, Mr. Edwab was elected President of the Company. He was elected a
director of the Company in 1991. In November 2000, Mr. Edwab joined Bear,
Stearns & Co. Inc. ("Bear Stearns") as a Senior Managing Director and Head of
the Retail Group in the Investment Banking Department of Bear Stearns.
Accordingly, Mr. Edwab resigned as President of the Company and was then named
Vice Chairman of the Board. In February 2002, Mr. Edwab re-joined the Company
full-time and continues to serve as Vice Chairman of the Board. Mr. Edwab is
also a director of Aeropostale, Inc.
Rinaldo S. Brutoco is and has been since January 2000, President and Chief
Executive Officer of ShangriLa Consulting, Inc. Prior to that Mr. Brutoco was
President and Chief Executive Officer of Dorason Corporation for more than five
years. ShangriLa Consulting, Inc. is affiliated with the ShangriLa Group, a
privately held consulting and merchant banking concern. In addition, through
October 1998, Mr. Brutoco served as the Chief Executive Officer and a director
of Red Rose Collection, Inc., a San Francisco-based mail order catalog and
retail company.
Michael L. Ray, Ph.D. has been on the faculty at Stanford University since
1967 and is currently the John G. McCoy -- Banc One Corporation Professor of
Creativity and Innovation and of Marketing Emeritus at Stanford University's
Graduate School of Business. Professor Ray is a social psychologist with
training and extensive experience in advertising and marketing management and
has served as a private consultant to numerous companies since 1967.
Sheldon I. Stein is a Senior Managing Director of Bear Stearns and runs the
Southwest Investment Banking Group. Mr. Stein joined Bear Stearns in August
1986. He is also a director of Home Interiors & Gifts, Inc. and is a Trustee of
Brandeis University.
Kathleen Mason has been the President, Chief Executive Officer and a
director of Tuesday Morning Corporation, a retailer of first quality, deep
discount and closeout home furnishings and gifts, since July 2000.
2
From December
1999 to July 2000, Ms. Mason was a freelance retailing consultant. From June
1999 to November 1999, she was President and Chief Merchandising Officer of
Filene's Basement, Inc. From January 1997 to June 1999 she was President of the
HomeGoods Division of The TJX Companies, Inc., an apparel and home fashion
retailer. Prior to that time she was employed by Cherry & Webb, a
women's apparel specialty chain, from 1987 until 1992, as Executive Vice
President, then until 1997 as Chairman, President and Chief Executive Officer.
Ms. Mason is also a director of Genesco, Inc.
2
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
During the fiscal year ended February 2, 2002,1, 2003, the Board of Directors held
sixfive meetings.
The Board of Directors has an audit committeeAudit Committee that operates under a written
charter adopted by the Board of Directors and is comprised of Messrs. Stein
(Chairman) and Ray and Ms. Mason. Each of the audit committee'sAudit Committee's members
satisfies the definition of independent director as established in the New York
Stock Exchange Listing Standards. It is the duty of the audit committeeAudit Committee to
review the Company's financial information, accounting policies and internal
controls, review with the Company's independent public accountants the plan,
scope and results of the annual audit of the Company's financial statements,
review and discuss the Company's annual and quarterly financial statements with
management and the Company's independent public accountants, and to make recommendationsselect the
Company's independent public accountants and approve in advance all audit and
non-audit engagements of such independent public accounts. The Audit Committee's
responsibilities to the Board of Directors as to the selection of independent public accountants.
The audit committee's responsibilities to the Board are further detailed in the amended
and restated Charter of the Audit Committee.Committee, which is attached to this proxy
statement as Appendix A. During the fiscal year ended February 2, 2002,1, 2003, the
audit committeeAudit Committee held threesix meetings. The audit committee'sAudit Committee's report appears below.
The Company has a compensation committeeCompensation Committee comprised solely of the Company's
non-employee directors, Ms. Mason (Chair) and Messrs. Brutoco, Ray and Stein.
Prior to October 1, 2002, the Compensation Committee was comprised of Messrs.
Stein (Chairman) and Ray. It is the duty of the Compensation Committee to review
and approve the Company's overall compensation committee topolicy and consider and approve,
on behalf of the Board of Directors, adjustments to the compensation of the
executive officers of the Company and the implementation of any compensation
program for the benefit of any executive officer of the Company. During the
fiscal year ended February 2, 2002,1, 2003, the compensation committee did not meet.Compensation Committee held one meeting.
The Company has a stock option committeeStock Option Committee which consists of Mr. G. Zimmer
that administers the Company's stock option plans. Mr. Goldman was a member of
the stock option committee until his retirement on February 1, 2002. During the fiscal year ended
February 2,1, 2003, the Stock Option Committee held one meeting.
In October 2002, the stock option committee didBoard of Directors established a Nominating and
Corporate Governance Committee comprised of Messrs. Ray (Chairman), Brutoco and
Stein. It is the duty of the Nominating and Corporate Governance Committee to
develop and recommend to the Board of Directors a set of corporate governance
principles for the Company, study and review with management the overall
effectiveness of the organization of the Board of Directors and the conduct of
its business and report and make recommendations to the Board of Directors as
appropriate, and consider candidates to be elected directors, including nominees
for directors recommended by shareholders of the Company, and recommend to the
Board of Directors the nominees for directors. As indicated, the Nominating and
Corporate Governance Committee will consider nominees for directors recommended
by shareholders of the Company, provided such recommendations are made in
accordance with the procedure set forth on page 20 of this proxy statement and
all other legal requirements, including all applicable provisions of the
Company's Restated Articles of Incorporation and Bylaws. As of the fiscal year
ended February 1, 2003, the Nominating and Corporate Governance Committee had
not meet.yet met.
During the fiscal year ended February 2, 2002,1, 2003, no director attended fewer
than 75% of all of the meetings of the Board of Directors and of any committee
of which such director was a member.
The Board of Directors has no executive or nominating committee. Director
nominees are determined by the Board of Directors, and nominees proposed by
shareholders will not be considered.
AUDIT COMMITTEE REPORT
In accordance with its written charter adopted by the Board of Directors,
("Board"), the Audit Committee of the Board ("Audit Committee")of Directors assists the Board in fulfilling
its responsibility for oversight of the quality and integrity of the accounting,
auditing and financial reporting practices of the Company. During fiscal year
2001,2002, the Audit Committee had threesix meetings, and the Audit Committee chair, as
representative of the Audit Committee, communicated with the financial
management and independent auditors regarding the interim financial information
contained in each quarterly earnings announcement prior to public release.
In discharging its oversight responsibility as to the audit process, the
Audit Committee obtained from the independent auditors a formal written
statement describing all relationships between the auditors and the Company that
might bear on the auditors' independence consistent with Independence Standards
Board
3
Standard No. 1, "Independence Discussions with Audit Committees," discussed with
the auditors any relationships that may impact their objectivity and
independence and satisfied itself as to the auditors' independence. The Audit
Committee also discussed with management and the independent auditors the
quality and adequacy of the Company's internal controls. The Audit Committee
reviewed with the independent auditors their audit plan, audit scope, and
identification of audit risks.
The Audit Committee discussed and reviewed with the independent auditors
all communications required by generally accepted auditing standards, including
those described in Statement on Auditing 3
Standards No. 61, as amended,
"Communication with Audit Committees" and, with and without management present,
discussed and reviewed the results of the independent auditors' examination of
the financial statements.
The Audit Committee reviewed and discussed the audited financial statements
of the Company as of and for the fiscal year ended February 2, 2002,1, 2003, with
management and the independent auditors. Management has the responsibility for
the preparation of the Company's financial statements and the independent
auditors have the responsibility for the examination of those statements.
Based on the above-mentioned review and discussions with management and the
independent auditors, the Audit Committee recommended to the Board of Directors
that the Company's audited financial statements be included in its Annual Report
on Form 10-K for the fiscal year ended February 2, 2002,1, 2003, for filing with the
Securities and Exchange Commission. The Audit Committee also approved the
reappointment, subject to shareholder approval, of the independent auditors and the Board also
approved such reappointment.auditors.
AUDIT COMMITTEE
Sheldon I. Stein, Chairman
Michael L. Ray, Ph.D.
Kathleen Mason
SHAREHOLDER PROPOSAL REGARDING A CODE OF CONDUCT
BASED ON THE UNITED NATION'S INTERNATIONAL LABOR
ORGANIZATION'S STANDARDS FOR WORKERS RIGHTS
New York City Employees' Retirement System, New York City Teachers'
Retirement System, New York City Police Pension Fund Art 2, New York City Fire
Department Pension Fund Art 2B, holders as of December 26, 200117, 2002 of 87,775,81,475,
43,550, 25,075 and 8,1754,575 shares of the Company's common stock, respectively,
each located at The City of New York Office of the Comptroller, 1 Centre Street,
New York, New York 10007-2341, have given formal notice that they will introduce
a resolution at the forthcoming annual meeting. The Company is not responsible
for such proposal, which provides as follows:
"Whereas, reports of human rights abuses in the overseas subsidiaries
and suppliers of some U.S.-based corporations has led to an increased
public awareness of the problems of child labor, "sweatshop" conditions,
and the denial of labor rights in U.S. corporate overseas operations, and
Whereas, corporate violations of human rights in these overseas
operations can lead to negative publicity, public protests, and a loss of
consumer confidence which can have a negative impact on shareholder value,
and
Whereas, a number of corporations have implemented independent
monitoring programs with respected human rights and religious organizations
to strengthen compliance with international human rights norms in
subsidiary and supplier factories, and
Whereas, these standards incorporate the conventions of the United
Nation's International Labor Organization (ILO) on workplace human rights
which include the following principles:
(1) All workers have the right to form and join trade unions and to
bargain collectively. (ILO Conventions 87 and 98)
4
(2) Workers representatives shall not be the subject of
discrimination and shall have access to all workplaces necessary to
enable them to carry out their representation functions. (ILO Convention
135)
(3) There shall be no discrimination or intimidation in employment.
Equality of opportunity and treatment shall be provided regardless of
race, color, sex, religion, political opinion, age, nationality, social
origin, or other distinguishing characteristics. (ILO Convention 100 and
111)
4
(4) Employment shall be freely chosen. There shall be no use of
force, including bonded or prison labor. (ILO Conventions 29 and 105)
(5) There shall be no use of child labor. (ILO Convention 138),
and,
Whereas, independent monitoring of corporate adherence to these
standards is essential if consumer and investor confidence in our company's
commitment to human rights is to be maintained,
Therefore, be it resolved that shareholders request that the company commit
itself to the implementation of a code of corporate conduct based on the
aforementioned ILO human rights standards by its international suppliers
and in its own international production facilities and commit to a program
of outside, independent monitoring of compliance with these standards."
THE COMPANY'S STATEMENT IN OPPOSITION
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
AGAINST THIS PROPOSAL FOR THE FOLLOWING REASONS:
The Company is strongly committed to maintaining high standards with
respect to workplace human rights. The Company itself does not operate any
facilities overseas, but purchases goods from vendors who have overseas
operations and engages in a direct sourcing program whereby the Company
contracts directly with third parties, predominantly in Italy, China and Mexico,
to manufacture certain of the merchandise sold in the Company's stores. We
attempt to select only overseas vendor partners and facilities who are committed
to following standards and business practices consistent with our own and have a
long-standing relationship with most of our vendors and direct sourcing
facilities. Further, the manufacturing of tailored clothing requires a more
experienced work force and, therefore, does not lend itself to the "sweatshop"
conditions referred to in the proposal. Additionally, we have a practice of
inspecting on a periodic basis the factories where goods are produced to our
specifications and quality requirements. This inspection process is important
for monitoring quality control and also allows us to monitor workplace
conditions. The Company has on occasion undertaken efforts to gain improvements
in conditions where warranted.
Accordingly, we believe we have already implemented practices to address
subjects mentioned in this shareholder proposal. Indeed, the proponents of this
proposal have not suggested that the Company has failed to meet any appropriate
workplace standards. We believe the Company's existing practices have worked
well and the requested commitment called for by this proposal is duplicative of
our existing efforts. Also, certain provisions of the proposal are vague and
overbroad and in some instances would require the Company to take action beyond
our ability to effectuate. We think we can be most effective by continuing to
focus on our existing standards and practices, rather than introducing a new and
duplicative statement of principles. The Board of Directors therefore does not
believe that adoption of this proposal is necessary or in the best interests of
the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST APPROVAL
OF THE PROPOSAL REGARDING A CODE OF CONDUCT BASED ON THE UNITED NATION'S
INTERNATIONAL LABOR ORGANIZATION'S STANDARDS FOR WORKERS RIGHTS.
5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of the Record Date except(except
as noted in note (1) below,below), with respect to the beneficial ownership of Common Stock by (i)
each director, (ii) each executive officer named in the Summary Compensation
Table below, (iii) each shareholder known by the Company to be the beneficial
owner of more than 5% of the Common Stock and (iv) all executive officers and
directors of the Company as a group. Unless otherwise indicated, each person has
sole voting power and investment power with respect to the shares attributed to
him or her.
% OF
OUTSTANDING
NAME NUMBER OF SHARES SHARES
- ---- ---------------- -----------
PRIMECAP Management Company............................... 2,983,200(1) 7.04,089,550(1) 10.0
225 South Lake Avenue #400
Pasadena, California 91101
Merrill Lynch & Co., Inc. ................................ 2,838,877(2) 6.7
World Financial Center, North Tower
250 Vesey Street
New York, New York 10381
Vanguard HorizonFunds-Vanguard Capital Opportunity Fund... 2,850,000(3) 7.0
100 Vanguard Blvd.
Malvern, Pennsylvania 19355
FMR Corp. ................................................ 3,186,740(4) 7.83,617,868(2) 9.1
82 Devonshire Street
Boston, Massachusetts 02109
Wasatch Advisors.......................................... 3,709,875(5) 8.8
150 Social Hall Avenue
Salt Lake City, Utah 84111Vanguard HorizonFunds-Vanguard Capital Opportunity Fund... 3,200,000(3) 8.1
100 Vanguard Blvd
Malvern, Pennsylvania 19355
George Zimmer(6)Zimmer(4).......................................... 3,979,482(7)(8)(20) 9.6
Richard E. Goldman........................................ 1,718,185(20) 4.1
Robert E. Zimmer.......................................... 1,330,660(8)(9)(20) 3.2
James E. Zimmer........................................... 978,079(8)(10)(20) 2.4
Stephen H. Greenspan...................................... 250,633(11) *3,461,292(5)(6)(15) 8.6
David H. Edwab............................................ 124,237(8)(12)(20)139,072(6)(7)(15) *
Rinaldo S. Brutoco........................................ 21,000(13)24,000(8) *
Sheldon I. Stein.......................................... 20,061(14)23,061(9) *
Michael L. Ray, Ph.D. .................................... 13,500(15)Ph.D...................................... 16,500(10) *
Kathleen Mason............................................ 3,000(15)6,000(10) *
Ronald B. Covin........................................... 10,109(11) *
Eric J. Lane.............................................. 80,900(16)(20) *104,348(12)(15)
Charles Bresler, Ph.D. ................................... 54,976(17)(20) *
Neill P. Davis............................................ 21,659(18)(20)80,972(13)(15) *
All executive officers and directors as a group (17
Persons)................................................ 8,670,545(8)(19)(20) 20.94,925,769(6)(14)(15) 12.3
(16)(17)(18)
- ---------------
* Less than 1%
(1) Based on a Schedule 13G filed on January 10,November 8, 2002, PRIMECAP Management
Company has sole voting power with respect to 133,200 of these shares and
dispositive power with respect to all of these shares.
(2) Based on a Schedule 13G filed on February 5, 2002, Merrill Lynch & Co.,
Inc. (ML&Co."), on behalf13, 2003, FMR Corp. has sole
power to vote 17,268 of Merrill Lynch Investment Managers, an
operating division of ML&Co.'s indirectly owned asset management
subsidiaries, Fund Asset Management, L.P., Merrill Lynch Investment
Managers Limited, Merrill Lynch Investment Managers, L.P. and QA Advisor
L.L.C. have shared voting and dispositive powers with respect to these shares. OwnershipFidelity Management & Research
Company ("Fidelity"), a wholly-owned subsidiary of such shares is disclaimed pursuant toFMR Corp. and an
investment adviser registered under Section 13d-4203 of the Securities ExchangeInvestment Advisers
Act of 1934.
6
1940, is the beneficial owner of 3,600,600 shares or 9.067% of the
Company's outstanding Common Stock. The ownership of one investment
company, Fidelity Low Priced Stock Fund, amounted to 2,973,600 shares or
7.488% of the Common Stock outstanding. Edward C. Johnson 3d, FMR Corp.,
through its control of Fidelity, and the funds each have sole power to
dispose of the 3,600,600 shares owned by the Funds, but neither FMR Corp.
nor Edward C. Johnson 3d, Chairman of FMR Corp., has the sole power to vote
or direct the voting of the shares owned directly by the Fidelity Funds,
which power resides with the Funds' Boards of Trustees. Geode Capital
Management, LLC is the beneficial owner of 17,268 shares or 0.043% of the
outstanding common stock of the Company. Geode LLC is wholly-owned by
Fidelity Investors III Limited Partnership and is an investment adviser
registered under Section 203 of the Investment Advisers Act of 1940.
(3) Based on a Schedule 13G filed on February 12, 2002,11, 2003, Vanguard
HorizonFunds-Vanguard Capital Opportunity Fund has sole voting power and
shared dispositive power with respect to these shares.
(4) Based on a Schedule 13G filed on February 14, 2002, FMR Corp. and Edward C.
Johnson 3d and Abigail P. Johnson, each as a shareholder, officer and/or
director of FMR Corp., have sole voting and dispositive powers with respect
to these shares. Fidelity Management & Research Company, a wholly-owned
subsidiary of FMR Corp., is the beneficial owner of these shares. However,
various persons have the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of, these shares.
Multiple Fidelity Funds hold shares in the Company, the largest of which is
Fidelity Low Priced Stock Fund with an interest in 3,060,000 shares.
(5) Based on a Schedule 13G filed on February 14, 2002, Wasatch Advisors, Inc.
has sole voting power and dispositive power with respect to all of these
shares.
(6) The business address of the shareholder is 40650 Encyclopedia Circle,
Fremont, California 94538-2453.
(7)6
(5) Includes 3,935,5833,417,383 shares held by George Zimmer in his capacity as trustee
for the George Zimmer 1988 Living Trust.
(8)(6) Excludes 146,599153,666 shares held by The Zimmer Family Foundation with respect
to which this officer and director has shared voting and dispositive power.
(9) Does not include the 31,666 shares of Common Stock held by Robert Zimmer's
wife.
(10)(7) Includes 940,897 shares held by James Zimmer in his capacity as trustee for
the James Edward Zimmer 1989 Living Trust and 5,464 shares held by Mr.
Zimmer's minor children.
(11) Includes 16,125 shares that may be acquired within 60 days upon the
exercise of stock options and includes 219,234 shares in a Family Limited
Partnership.
(12) Includes 2,7172,542 shares held by David H. Edwab in his capacity as trustee of
the David H. Edwab and Mary Margaret Edwab Family Trust. Also includes
120,000135,000 shares that may be acquired within 60 days upon exercise of stock
options.
(13)(8) Includes 19,50022,500 shares that may be acquired within 60 days upon the
exercise of stock options.
(14)(9) Includes 15,00018,000 shares that may be acquired within 60 days upon the
exercise of stock options and includes 5,061 shares held by Mr. Stein's
sons.
(15)(10) Represents shares that may be acquired within 60 days upon the exercise of
stock options.
(16)(11) Includes 78,938 shares that may be acquired within 60 days upon the
exercise of stock options.
(17) Includes 54,25010,000 shares that may be acquired within 60 days upon the
exercise of stock options and 225109 shares allocated to the account of Mr.
Covin under The Men's Wearhouse, Inc. Employee Stock Discount Plan (the
"ESDP").
(12) Includes 102,376 shares that may be acquired within 60 days upon the
exercise of stock options.
(13) Includes 74,438 shares that may be acquired within 60 days upon the
exercise of stock options and 6,023 shares allocated to the 401(k) account
of Mr. Bresler under The Men's Wearhouse, Inc. 401(k) Savings Plan (the
"401(k) Savings Plan").
(18)(14) Includes 17,500512,067 shares that may be acquired within 60 days upon the
exercise of stock options.
(19)(15) Includes 474,93943,909 shares, that may be acquired within 60 days upon the
exercise of stock options.
(20) Includes 43,8991,530 shares, 2,3231,822 shares, 40,080 shares, 31,718 shares, 1,520
shares, 1,812 shares, 501 shares, 159511 shares and 123,21480,993
shares, respectively, allocated to The Men's Wearhouse, Inc. Employee Stock
Plan (the "ESP") accounts of Messrs. George Zimmer, Robert Zimmer, Richard
Goldman, James Zimmer, David Edwab, Eric Lane
and Charles Bresler and Neill
Davis and to certain executive officers included in all
executive officers and directors of the Company as a group, under the ESP.
The ESP provides that participants have voting power with respect to these
shares but do not have investment power over these shares.
(16) Includes 8,685 shares allocated to the 401(k) Savings Plan accounts to
certain executive officers of the Company. The 401(k) Savings Plan provides
that participants have voting and investment power over these shares.
(17) Includes 494 shares allocated to the ESDP accounts to certain executive
officers of the Company. The ESDP provides that participants have voting
power with respect to these shares and investment power over these shares.
(18) Includes 10,525 shares held by family members of certain executive officers
and directors of the Company.
7
EXECUTIVE OFFICERS
The following table lists the name, age, current position and period of
service with the Company of each executive officer of the Company. Each
executive officer of the Company was elected by the Board of Directors of the
Company and will hold office until the next annual meeting of the Board of
Directors or until his or her successor shall have been elected and qualified.
EXECUTIVE
OFFICER
NAME AGE POSITION WITH THE COMPANY SINCE
- ---- --- ------------------------- ---------
George Zimmer............... 5354 Chairman of the Board and Chief Executive Officer 1974
David H. Edwab.............. 4748 Vice Chairman of the Board 1991
Eric J. Lane................ 4243 President and Chief Operating Officer 1993
Charles Bresler, Ph.D....... 53Ph.D. ..... 54 Executive Vice President -- Stores, Marketing and 1993
Human Development
Ronald B. Covin............. 54 Chief Executive Officer -- K&G Men's Company Inc. 2001
Pasquale De Marco........... 42 President -- Moores Retail Group Inc. 2003
Neill P. Davis.............. 4546 Executive Vice President, Chief Financial Officer 1997
Treasurer and Principal Financial Officer
Robert E. Zimmer............ 78 Senior Vice President -- Real Estate 1974
James E. Zimmer............. 50 Senior Vice President -- Merchandising 1975
Douglas S. Ewert............ 3839 Executive Vice President and General Merchandise 2000
Manager
Gary G. Ckodre.............. 5253 Senior Vice President and Principal Accounting-- Finance 1992
Officer
Jeffery Marshall............ 4950 Senior Vice President and Chief Information Officer 1999
Ronald B. Covin............. 53 Chief ExecutiveJames E. Zimmer............. 51 Senior Vice President -- Merchandising 1975
Jerry L. Lovejoy............ 49 Vice President and General Counsel 2003
Diana M. Wilson............. 55 Vice President and Principal Accounting Officer -- K&G Men's Company 20012003
See the table under "Election of Directors" for the past business
experience of Messrs. George Zimmer and David Edwab.
Eric J. Lane joined the Company in 1988. From 1991 to 1993, he served as
Vice President -- Store Operations and in 1993 he was named Senior Vice
President -- Merchandising. In February 1997, Mr. Lane became Chief Operating
Officer of the Company and in November 2000 he was named President of the
Company.
Charles Bresler, Ph.D. joined the Company in 1993. From 1993 to 1998, he
served as Senior Vice President -- Human Development. In February 1998, he was
named Executive Vice President. Neill P. Davis joined the Company in 1997. Since 1997 he served as Vice
President and Treasurer and in November 2000In March 2003, he was named Senior Vice President,
Chief Financial Officer and Treasurer. In March 2001 he was named Principal
Financial Officer. In March 2002 he was promoted torenamed Executive Vice
President -- Stores, Marketing and remains Chief Financial Officer, Treasurer and Principal Financial Officer.
Before joining the Company, he served as Senior Vice President and Manager in
the Global Corporate Group of NationsBank (currently Bank of America) since
1987. He has 17 years of corporate banking experience, all with NationsBank and
its predecessors.
Robert E. Zimmer has served as Senior Vice President of the Company since
its incorporation in 1974 and is primarily responsible for new store site
selection and arrangements. Mr. R. Zimmer has served as a director of the
Company since its incorporation in 1974 but will not seek re-election at this
year's Annual Meeting.
James E. Zimmer has served as Senior Vice President of the Company since
1975 and works primarily with the President and Chief Operating Officer in
coordinating the Company's merchandising function. Mr. J. Zimmer has served as a
director of the Company since 1975 but will not seek re-election at this year's
Annual Meeting.
Douglas S. Ewert joined the Company in 1995. From 1996 to 1999 he served as
General Merchandise Manager. From 1999 to 2000 he served as Vice
President -- Merchandising and General Merchandise Manager. In April 2000 he was
named Senior Vice President -- Merchandising, and in March 2001 he was named
Executive Vice President and Chief Operating Officer, K&G Men's Company. In
March 2002, he was named Executive Vice President and General Merchandise
Manager.
8
Gary G. Ckodre joined the Company in 1992. Since 1992 he served as the
Chief Accounting Officer, in February 1997 he was named Vice
President -- Finance and Principal Financial and Accounting Officer, and in
March 2001 he was named Senior Vice President and Principal Accounting Officer.
Jeffrey Marshall joined the Company in 1996. From 1996 to 1999 he served as
Vice President -- Information and Technology and in July 1999 he was named Chief
Information Officer of the Company.Human Development.
Ronald B. Covin joined the Company in 2001 when he was named Chief
Executive Officer of K&G Men's Company Inc. Before joining the Company, Mr.
Covin served as the President of Off 5th SAKS Fifth Avenue Outlet ("Off 5th"), a
division of Saks Inc., from 1999 to 2001, as Senior Vice President and General
Manager of Off 5th from 1997 to 1999 and as Senior Vice President and General
Merchandise Manager of Off 5th from 1994 to 1997.
HePasquale De Marco joined the Company as the chief financial officer of
Moores Retail Group Inc. ("Moores") following the closing of the merger of a
wholly owned subsidiary of the Company with Moores on February 10, 1999. Prior
to the merger, Mr. De Marco had been the Chief Financial Officer of Moores
Retail Group Inc. since its inception. Prior to joining Moores in 1995, Mr. De
Marco was a partner at the accounting firm of Ernst & Young. In March 2003, Mr.
De Marco was named President -- Moores Retail Group Inc. and designated an
executive officer of the Company.
Neill P. Davis joined the Company in 1997 as Vice President and Treasurer.
In November 2000 he was named Senior Vice President, Chief Financial Officer and
Treasurer and in March 2001 he was named Principal Financial Officer. In March
2002, he was promoted to Executive Vice President and remained Chief Financial
Officer, Treasurer and Principal Financial Officer. In March 2003, he was named
Executive Vice President, Chief Financial Officer and Principal Financial
Officer.
8
Douglas S. Ewert joined the Company in 1995. From 1996 to 1999, he served
as General Merchandise Manager. From 1999 to 2000, he served as Vice
President -- Merchandising and General Merchandise Manager. In April 2000, he
was named Senior Vice President -- Merchandising, and in March 2001 he was named
Executive Vice President and Chief Operating Officer, K&G Men's Company. In
March 2002, he was named Executive Vice President and General Merchandise
Manager.
Gary G. Ckodre joined the Company in 1992. In February 1997 he was named
Vice President -- Finance and Principal Financial and Accounting Officer, and in
March 2001 he was named Senior Vice President and Principal Accounting Officer.
In March 2003 he was named Senior Vice President -- Finance.
Jeffery Marshall joined the Company in 1996. From 1996 to 1999, he served
as Vice President -- Information and Technology and in July 1999 he was named
Chief Information Officer of the Company. In March 2003, he was named Senior
Vice President and Chief Information Officer.
James E. Zimmer has at least 25 years
experienceserved as Senior Vice President -- Merchandising since
1975. Mr. J. Zimmer served as a director of the Company until June 2002 when he
chose not to seek re-election.
Jerry L. Lovejoy joined the Company in January 2003 as Vice President and
General Counsel. Prior to joining the retail industry.Company, Mr. Lovejoy was the Division
Counsel of the West Division of McDonald's Corporation, the Oak Brook, Illinois
fast food chain, from 1999 to 2003. Prior to his employment with McDonald's
Corporation, he served as Vice President and General Counsel of Baskin-Robbins,
Inc. from 1995 to 1999.
Diana M. Wilson joined the Company in March 1999 as Corporate Controller.
In March 2001 she was named Vice President and Corporate Controller and in March
2002 she was named Vice President -- Finance. In March 2003 she was named Vice
President -- Principal Accounting Officer. Prior to joining the Company, Ms.
Wilson was an audit director with Deloitte & Touche L.L.P. from 1988 to 1999.
George Zimmer and James E. Zimmer are brothers, and Robert E. Zimmer is
their father.brothers.
9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding cash
compensation paid for services rendered during the last three fiscal years to
each of the Company's five most highly compensated executive officers, including
the Chief Executive Officer:
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------------- ------------
OTHER ANNUAL SECURITIES ALL OTHER
COMPENSATION UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(5) OPTIONS(7) ($)(9)
- --------------------------- ---- ------------ ----------- ------------ ------------ ------------
George Zimmer................ 20012002 420,000(1) 25,000(2)16,500(2) -- -- 78,764(10)31,113(10)
Chairman of the Board and 2001 420,000 25,000(3) -- -- 78,764(10)
Chief Executive Officer 2000 428,076 37,500(3)37,500(4) -- -- 74,360(10)
Ronald B. Covin.............. 2002 420,000(1) 50,000(2) -- -- 200(11)
Chief Executive Officer 1999 420,000 87,500(4)-- 2001 161,540 160,000(3) -- 100,000(8) --
K&G Men's Company Inc. 2000 -- -- 68,718(10)-- -- --
David H. Edwab............... 2002 540,077(1) -- 46,655(6) 100,000(8) 2,224(13)
Vice Chairman of the Board 2001 60,693 -- -- -- 10,229(13)
2000 345,000 -- -- 40,000(8) 10,621(11)(13)
Eric J. Lane................. 2001 401,346(1) 25,000(2) 17,388(6) -- 4,220(11)2002 410,000(1) 33,000(2) 66,951(7) 100,000(8) 769(11)(12)
President and Chief 2001 401,346 25,000(3) 17,388(7) -- 4,220(11)(12)
Operating Officer 2000 355,385 37,500(3) 44,793(6)37,500(4) 44,793(7) 115,000(8) 1,575(12)
Operating Officer 1999 301,000 87,500(4) 41,900(6)1,575(11)
Charles Bresler, Ph.D........ 2002 330,000(1) 40,000(2) -- 982(12)
James E. Zimmer.............. 2001 360,000(1) 15,000(2) -- -- 1,362
Senior100,000(8) 401(11)
Executive Vice President -- 2000 366,923 22,500(3)2001 324,808 25,000(3) -- -- 1,007
Merchandising 1999 360,000 52,500(4) -- -- 1,098
Charles Bresler, Ph.D........ 2001 324,808(1) 25,000(2) -- -- 1,218(12)
Executive Vice President1,218(11)
Stores, Marketing and 2000 296,769 37,500(3)37,500(4) -- 97,500(8) 1,591(12)
1999 260,000 87,500(4) -- -- 970(12)
Neill P. Davis............... 2001 292,731(1) 10,000(2) -- 7,500(8) 1,009
Executive Vice President, 2000 257,712 13,500(3) -- 3,500(8) 1,401
CFO Treasurer and 1999 232,583 26,250(4) -- -- 802
Principal Financial
Officer1,591(11)
Human Development
- ---------------
(1) Represents salary for 52 weeks for the fiscal year 2001.2002.
(2) Represents bonus paid in April 2003 relating to services performed in 2002.
(3) Represents bonus paid in April 2002 relating to services performed in 2001.
(3)(4) Represents bonus paid in April 2001 relating to services performed in 2000.
(4) Represents bonus paid in April 2000 relating to services performed in 1999.
(5) Excludes perquisites and other benefits because the aggregate amount of
such compensation was the lesser of $50,000 or 10% of the total annual
salary and bonus reported for the named executive officer.
(6) Represents cashamount paid in connection with insurance premiums (see
"Split-Dollar Life Insurance Agreements").
(7) Includes $41,995, $17,388 and $44,793 paid to Mr. Lane in 2002, 2001 and
2000 in connection with the repayment of the
advanceadvances given to Mr. Lane to enable him to purchase a residencein 1996
and 2002 in connection with purchases of residences (see "Certain
Relationships and Related Transactions").
(7) All share amounts have been adjusted to reflect a 50% stock dividend
effected and $24,956 in June 1998.2002 paid in
connection with insurance premiums (see "Split-Dollar Life Insurance
Agreements").
(8) Represents number of options granted to the named executive officer.
(9) Represents the amount of the Company's contribution to the ESP allocated in
the indicated year to the account of the named executive officer.
(10) Also includes $30,912, $77,268 and $73,503 in 2002, 2001 and $67,508 in 2001, 2000, and 1999,
respectively, for the allocated dollar value of the benefits to Mr. George Zimmer
of life insurance premiums paid on his behalf, subject to certain
split-dollar provisions in favor of the Company.
(11) Also includes $200 of the Company's matching contributions to the 401(k)
Savings Plan allocated in such year to the account of the named executive
officer.
(12) Also includes $368 and $2,987 in 2002 and 2001, respectively, for the
allocated dollar value of the benefits to Mr. Eric Lane of life insurance
premiums paid on his behalf, subject to certain split-dollar provisions in
favor of the Company.
(12)10
(13) Also includes $200, $200$2,023, $9,899 and $60$9,243 in 2002, 2001 and 2000,
respectively, for the allocated dollar value of the benefits to Mr. Edwab
of life insurance premiums paid on his behalf, subject to certain split-
dollar provisions in favor of the Company.
EMPLOYMENT AGREEMENT
To induce David H. Edwab to re-join the Company, the Company entered into
an Employment Agreement with Mr. Edwab effective as of February 3, 2002 (the
"Employment Agreement") for an initial term beginning February 3, 2002 and
extending through February 2, 2007. Under the Employment Agreement the Company
agreed, among other things, to:
- pay Mr. Edwab an annual base salary of $560,000, plus $40,000 per year
for reimbursement of various business related expenses, including
automobile and club membership expenses;
- provide disability and medical insurance coverage and certain other
benefits provided to other employees; and
- pay Mr. Edwab a bonus of $3,000,000 (the "Long-Term Incentive Bonus") at
the end of the term of the Employment Agreement, subject to a credit
equal to the "Stock Option Value" (as defined in the Employment
Agreement) of those stock options held by Mr. Edwab on the date of the
Employment Agreement and those stock options issued to him subsequent
thereto.
The Company may terminate Mr. Edwab's employment under the Employment
Agreement for "cause" (as defined in the Employment Agreement), in which event
the Company will pay all compensation and benefits due Mr. Edwab under the
Employment Agreement to the date of termination, which will satisfy all of the
Company's matching contributionsobligations under the Employment Agreement. If the Company terminates
Mr. Edwab's employment without "cause" or Mr. Edwab terminates his employment
for "good reason" (as defined in the Employment Agreement), then the Company
will be required to pay Mr. Edwab a lump sum payment equal to all amounts owed
through the 401(k) Savings Plan allocateddate of termination as well as the accrued Long-Term Incentive Bonus
and Mr. Edwab will continue to receive his base salary at the then current rate
and all benefits to which Mr. Edwab is entitled under the Employment Agreement
for a period of two years following the date of termination.
If the Company does not offer Mr. Edwab the opportunity to enter into a new
employment agreement prior to February 2, 2006, with terms, in 2001, 2000, and 1999, respectively,all respects, no
less favorable to Mr. Edwab than the accountterms of the named executive officer.
10
Employment Agreement and with
a term lasting until at least February 2, 2009, Mr. Edwab shall have the right
to elect to terminate his employment effective as of February 2, 2007. In the
event of such termination, he will be entitled to continue to receive (a) his
base salary at the then current rate for a period of one year following the date
of termination and (b) all benefits to which he is entitled under the Employment
Agreement for a period of two years following the date of termination. If the
Company offers Mr. Edwab a new employment agreement and Mr. Edwab declines to
accept it, his employment will terminate on February 2, 2007, at which time he
will be entitled to all compensation, rights and benefits accrued at such date.
SPLIT-DOLLAR LIFE INSURANCE AGREEMENTS
The George Zimmer 1988 Living Trust is presently the owner of 3,935,5833,417,383
shares of Common Stock. The Company has been advised that on the demise of
George Zimmer, his estate may be required to publicly sell all or substantially
all of such shares to satisfy estate tax obligations. The public sale of such
number of shares in all probability would destabilize the market for the
Company's publicly traded stock. Accordingly, in November 1994, an agreement was
entered into (commonly known as a split-dollar life insurance agreement) under
the terms of which the Company makes advances of the premiums for certain life
insurance policies on the life of George Zimmer with an aggregate face value, as
amended, of $25,500,000 purchased by a trust established by Mr. Zimmer. To
secure the repayment of the advances, the trust has assigned the policies to the
Company as collateral. Further, a second split-dollar life insurance agreement
with essentially the same terms as the existing agreement was entered into
relating to a life insurance policy on the life of George Zimmer with
11
a face value of $1,000,000 purchased by a second trust established by Mr.
Zimmer. The trusts have assigned the additional policies to the Company as
collateral.
The Company has also entered into split dollar life insurance agreements
with Mr. Edwab under the terms of which the Company made advances of the
premiums on $3,000,000 in life insurance policies owned by a trust established
by Mr. Edwab and payable to beneficiaries designated by him (subject to certain
split-dollar provisions in favor of the Company). To secure the repayment of the
premiums, the Trust has assigned the policies to the Company as collateral.
Additionally, on January 14, 2002, the Company entered into a split dollar
life insurance agreement with Eric Lane under the terms of which the Company
makesmade advances of the premiums for a life insurance policy with an aggregate face
value of $2,000,000 purchased by Mr. Lane on his life. To secure the repayment
of the advances, Mr. Lane has assigned the policy to the Company as collateral.
In light of the provisions of the Sarbanes-Oxley Act of 2002 which prohibit
the Company from making loans to its officers and directors (which may encompass
the advancement of premiums for life insurance policies even though secured by
the cash payable pursuant to such policies), the Company has ceased making
premium payments as loans to Messrs. Zimmer, Edwab and Lane. The Company has
elected to pay the premiums on behalf of Messrs. Edwab and Lane as additional
compensation with an additional increase in compensation to cover the taxes due
on such compensation.
EMPLOYEE STOCK OPTION PLANS
The Company maintains The Men's Wearhouse, Inc. 1996 Stock Option Plan (the
"1996 Option Plan") and 1998 Key Employee Stock Option Plan (the "1998 Option
Plan") (collectively, the "Plans") for the benefit of its full-time key
employees. The Company also maintained The Men's Wearhouse, Inc. 1992 Stock
Option Plan which expired in February 2002. Under the 1996 Option Plan options
to purchase up to 1,850,000 shares of Common Stock may be granted. Under the
1998 Option Plan, options to purchase up to 2,100,000 shares of Common Stock may
be granted.
The Plans are administered by the Stock Option Committee of the Company's
Board of Directors which currently consists of George Zimmer. The individuals
eligible to participate in the Plans are such full-time key employees, including
officers and employee directors, of the Company as the Stock Option Committee
may determine from time to time. However:
- George Zimmer, Robert E. Zimmer and James E. Zimmer are not eligible to participate in any
of the Plans; and
- no executive officers of the Company may participate in the 1998 Option
Plan.
The Stock Option Committee may grant either (i) incentive stock options
within the meaning of section 422 of the Internal Revenue Code of 1986, as
amended, or (ii) non-statutory stock options under the 1996 Option Plan. Only
non-statutory stock options may be granted by the Stock Option Committee under
the 1998 Option Plan. The maximum number of shares subject to options that may
be awarded under the 1996 Option Plan to any employee during any consecutive
three-year period is 500,000 shares of Common Stock. Under the Plans, the
purchase price of shares subject to an option granted under the Plans is
determined by the Stock Option Committee at the date of grant. Generally, the
price at which a non-qualified stock option may be granted may not be less than
50% of the fair market value of the shares of Common Stock on the date of grant.
Options granted under the Plans must be exercised within ten years from the date
of grant. Unless otherwise provided by the Stock Option Committee, the options
vest with respect to one-third of the shares covered thereby on each of the
first three anniversaries of the date of grant. In the case of any eligible
employee who owns or is deemed to own stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or its parent
or subsidiaries, (i) the option price of any incentive stock option granted may
not be less than 110% of the fair market value of the Common Stock on the date
of grant and (ii) the exercisable period may not exceed five years from date of
grant. With respect to any other eligible employee, the option price of any
incentive stock option may not be less than 100% of such fair market value.
1112
Options granted under the Plans are not transferable by the optionee other
than by will or under the laws of descent and distribution. Options granted
under the Plans terminate on the earlier of (i) the expiration date of the
option or (ii) one day less than one month after the date the holder of the
option terminated his or her employment with the Company for any reason other
than the death, disability or, in the case of a non-statutory option, the
retirement of such holder. During such one-month period, the holder may exercise
the option in respect of the number of shares that were vested on the date of
such severance of employment. In the event of severance because of the death or
disability of a holder before the expiration date of the option, the option
terminates on the earlier of such (i) expiration date or (ii) one year following
the date of severance. During this period the holder generally may exercise the
option in respect of the number of shares that were vested on the date of
severance because of disability. In the event of the retirement of the holder, a
non-statutory option terminates on the earlier of (i) the expiration date of the
option or (ii) one-year following the date of retirement. During this period,
the holder generally may exercise the option in respect of the number of shares
that were vested on the date of severance because of retirement.
OPTION GRANTS
The following table sets forth the aggregate option grants during the last
fiscal year to the named executive officers:
OPTION/SAR GRANTS IN FISCAL 20012002
GRANT
SHARES OF PERCENT OF DATE
COMMON STOCK TOTAL OPTIONS EXERCISE PRESENTGRANT DATE
UNDERLYING GRANTED TO PRICE PER VALUEPRESENT
NAME OPTIONS(#)(2) EMPLOYEES SHARE($) EXPIRATION ($VALUE($)(1)
- ---- ------------------------- ------------- --------- ---------- ------------------
George Zimmer........................Zimmer....................... -- -- -- -- Eric J. Lane.........................--
Ronald B Covin...................... -- -- -- -- James E. Zimmer...................... --
-- -- --David H. Edwab...................... 100,000 19.97 21.36 2/11/12 1,221,270
Eric J. Lane........................ 100,000 19.97 21.36 2/11/12 1,221,270
Charles Bresler, Ph.D. .............. -- -- -- --
Neill P. Davis....................... 7,500(2) 1.50 24.95Ph. D. ............ 100,000 19.97 21.36 2/22/11 106,06411/12 1,221,270
- ---------------
(1) Based upon Black-Scholes option valuation model. The calculation assumes
volatility of 54.01%54.14%, a risk free rate of 4.99%4.29%, a six year expected life,
turnover of 6.6%9.03%, no expected dividends and option grants at $24.95$21.36 per
share. The actual value, if any, which may be realized with respect to any
option will depend on the amount, if any, by which the stock price exceeds
the exercise price on the date the option is exercised. Thus, such valuation
may not be a reliable indication as to value and there is no assurance the
value realized will be at or near the value estimated by the Black-Scholes
model.
(2) Represents options granted under the 1996 Option Plan which become fully
exercisable on February 22, 2006.
12August 11, 2011.
13
OPTION EXERCISES
The following table sets forth the aggregate option exercises during the
last fiscal year and the value of outstanding options at year-end held by the
named executive officers:
AGGREGATE OPTION EXERCISES IN FISCAL 20012002 AND OPTION VALUES AT FEBRUARY 2, 20021, 2003
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE OPTIONS AT YEAR END(#) OPTIONS AT YEAR END($)
NAME EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ----------- ----------- ------------------------- -------------------------
George Zimmer............... -- -- -- --
Ronald B. Covin............. -- -- 10,000/90,000 0/0
David H. Edwab.............. -- -- 135,000/150,000 0/0
Eric J. Lane................ -- -- 77,063/108,438 409,490/123,131
James E. Zimmer.............100,501/185,000 89,638/0
Charles Bresler, Ph. D. .... -- -- -- --
Charles Bresler, Ph.D....... -- -- 52,375/93,688 177,766/77,576
Neill P. Davis.............. -- -- 13,000/25,000 57,320/71,65172,563/173,500 57,955/0
COMPENSATION OF DIRECTORS
Employee directors of the Company do not receive fees for attending
meetings of the Board of Directors. Each non-employee director of the Company
receives a quarterly retainer of $6,250. In addition, under the Director Plan
each person who is a non-employee director on the last business day of each
fiscal year of the Company is granted an option to acquire 3,000 shares of
Common Stock. All options granted permit the non-employee director to purchase
the option shares at the closing price on the date of grant and become
exercisable one year after the date of grant. All options granted under the
Director Plan must be exercised within 10 years of the date of grant. Such
options terminate on the earlier of the date of the expiration of the option or
one day less than one month after the date the director ceases to serve as a
director of the Company for any reason other than death, disability or
retirement as a director.
Pursuant to the terms of the agreement made in November 2000 between the
Company and Mr. Edwab upon his retirement as President in 2001, Mr. Edwab was
not eligible to receive any retainer fees paid to non-employee directors or to
participate in the Director Plan. In lieu thereof, the Company paid Mr. Edwab a
monthly retainer of $5,000, which the Company ceased paying when Mr. Edwab
rejoined the Company on a full-time basis.
On February 1, 2002,January 31, 2003, the Company granted each of Messrs. Brutoco, Stein and
Ray and Ms. Mason an option to purchase 3,000 shares of Common Stock at $21.86$14.01
per share pursuant to the Director Plan.
1314
PERFORMANCE GRAPH
The following graph compares, as of each of the dates indicated, the
percentage change in the Company's cumulative total shareholder return on the
Common Stock with the cumulative total return of the NYSE Composite Index and
the Retail Specialty Apparel Index. The graph assumes that the value of the
investment in the Common Stock and each index was $100 at April 15, 1992 (the
date the Common Stock was first publicly traded) and that all dividends paid by
those companies included in the indices were reinvested. For periods prior to
October 2, 2000, our common stock was quoted on the Nasdaq National Market.
[PERFORMANCE GRAPH](PERFORMANCE GRAPH)
MEASUREMENT PERIOD (FISCAL YEAR COVERED)
- ----------------------------------------------------------------------------------------------------------------------------------
04/15/92 01/30/93 01/29/94 01/28/95 02/03/96 02/01/97 01/31/98 01/30/99 01/29/00 02/03/01
- ----------------------------------------------------------------------------------------------------------------------------------
Company 1.000 1.423 3.043 2.567 4.889 4.608 6.209 7.691 6.263 8.354
Retail Specialty
Apparel 1.000 1.070 0.929 0.802 0.868 1.048 1.680 2.890 2.563 3.028
NYSE Composite
Index 1.000 1.020 1.215 1.189 1.656 2.099 2.436 2.883 3.308 3.347
- -------------------- ---------------------------
02/02/02 02/01/03
- -------------------- ---------------------------
Company 5.675 3.637
Retail Specialty
Apparel 1.952 2.287
NYSE Composite
Index 3.052 2.481
The foregoing graph is based on historical data and is not necessarily
indicative of future performance. This graph shall not be deemed to be
"soliciting material" or to be "filed" with the Commission or subject to
Regulations 14A and 14C under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or to the liabilities of Section 18 under the Exchange
Act.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee of the Board of Directors of the
Company was, during fiscal 2001,2002, an officer or employee of the Company or any of
its subsidiaries, or was formerly an officer of the Company or any of its
subsidiaries, or had any relationships requiring disclosure by the Company under
Item 404 of Regulation S-K.
14
During fiscal 2001,2002, no executive officer of the Company served as (i) a
member of the compensation committee (or other board committee performing
equivalent functions) of another entity, one of whose executive officers served
on the Compensation Committee of the Board of Directors, (ii) a director of
another entity, one of whose executive officers served on the Compensation
Committee, or (iii) a member of the
15
compensation committee (or other board committee performing equivalent
functions) of another entity, one of whose executive officers served as a
director of the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Compensation Committee") of the Board of Directors of the Company is
pleased to present its 20012002 report on executive compensation. This Compensation
Committee report documents components of the Company's executive officer
compensation programs and describes the basis on which 20012002 compensation
determinations were made by the Compensation Committee with respect to the
executive officers of the Company, including the executive officers that are
named in the compensation tables. The Compensation Committee is comprised
entirely of non-employee directors.
Compensation Philosophy and Overall Objectives of Executive Compensation
Programs
It is the philosophy of the Company to ensure that executive compensation
be directly linked to continuous improvements in corporate financial performance
and increases in shareholder value. The following objectives, which were adopted
by the Compensation Committee, serve as the guiding principles for all
compensation decisions:
- Provide a competitive total compensation package that enables the Company
to retain key executives.
- Integrate pay programs with the Company's annual and long-term business
objectives and strategy, and focus executive behavior on the fulfillment
of those objectives.
- Provide variable compensation opportunities that are directly linked to
the performance of the Company and that align executive remuneration with
the interests of shareholders.
The Compensation Committee believes that the Company's current executive
compensation program has been designed and is administered in a manner
consistent with these objectives.
Executive Compensation Program Components
The Company uses cash- and equity-based compensation to achieve its
pay-for-performance philosophy and to reward short- and long-term performance.
Base Salary. The Company's compensation philosophy is to control
compensation costs and to place greater emphasis on incentive compensation based
on results. Accordingly, the Compensation Committee believes that the Company's
base salaries are well within the industry norms for companies of similar size.
Salaries for executives are reviewed periodically and revised, if appropriate,
based on a variety of factors, including individual performance, level of
responsibility, prior experience, breadth of knowledge, external pay practices
and overall financial results.
Incentive Compensation. The Company's philosophy is to use a combination
of annual and long-term compensation methods for the majority of the Company's
management. The Compensation Committee understands that certain of the executive
officers named in the compensation table hold significant ownership interests in
the Company. Accordingly, it is the belief of the Compensation Committee that
incentives through stock option participation at this time for the majority of
these individuals would not significantly affect the short-term or long-term
perspective of these individuals.
The Compensation Committee adopted a bonus program for 20012002 in which
executive officers participate. The maximum bonus set for each of the named
executive officers is based upon the total compensation package of the officer
relative to his duties and ranges from $40,000$50,000 to $100,000.
15
$200,000.
The criteria for determining the amount of bonus participation is based on:
(i) the Company attaining sales goals, (ii) the Company attaining net income
goals, (iii) the Company attaining shrinkage goals, and (iv)(iii) the officer attaining personal goals. Each of the first threetwo
criteria are quantitative, while the fourththird criterion is subjective. The
Company's bonus program for the majority of the work force is based on attaining
similar sales andgoals as well as shrinkage goals.
16
Discussion of 20012002 Compensation for the Chief Executive Officer
George Zimmer, Chairman of the Board and Chief Executive Officer of the
Company, is a significant shareholder in the Company, as well as one of the
Company's founders.
In determining Mr. Zimmer's compensation for 2001,2002, the Compensation
Committee considered the Company's financial performance and corporate
accomplishments, individual performance and salary data for chief executive
officers of other publicly held apparel companies having a size and focus that
the Compensation Committee believed comparable to the Company's. The
Compensation Committee also reviewed more subjective factors, such as
development and implementation of the corporate strategies to enhance
shareholder value and the Company's overall corporate philosophy. The
Compensation Committee feels that Mr. Zimmer's compensation program for 20012002 and
20022003 is conservative.
Base Salary. Mr. Zimmer's base salary during fiscal 20012002 was $35,000 per
month. While the Compensation Committee believes that the performance of Mr.
Zimmer and the Company would justify a substantial increase in Mr. Zimmer's base
salary, Mr. Zimmer has advised the Compensation Committee that he is satisfied
with his current base salary and therefore no change has been approved for
fiscal 2002.2003.
Annual Incentive. Mr. Zimmer was paid a $25,000$16,500 bonus under the 20012002 bonus
program. Mr. Zimmer will be eligible for a bonus of up to $100,000$200,000 in 20022003 based
on the criteria discussed under "Incentive Compensation", except thaton: (i) the Company attaining shrinkagesales goals, will no longer be included in(ii) the Company attaining net income
goals, and (iii) Mr. Zimmer attaining certain personal goals. Each of the first
two criteria for
determiningare quantitative, while the amount of his bonus.third criterion is subjective.
Summary. It is the opinion of the Compensation Committee that the total
compensation program for 20012002 for the executive officers relative to the
Company's performance was reasonable and that the compensation to George Zimmer
remains modest in light of management's achievements and the total compensation
packages provided to chief executive officers by other publicly held clothing
retailers.
COMPENSATION COMMITTEE
Sheldon I. Stein, ChairmanKathleen Mason, Chair
Rinaldo S. Brutoco
Michael L. Ray, Ph.D.
16Sheldon I. Stein
17
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company leases a warehouse facility in Houston, Texas from Zig Zag, a
Texas joint venture, in which Richard E. Goldman, who chose not to stand for
re-election at last year's annual meeting of shareholders, George Zimmer and
James E. Zimmer and Richard E.
Goldman are the sole and equal joint venturers. During 2001,2002, the Company
paid rentals of $78,000 to Zig Zag. The lease expires on August 31, 2005.
The Company also leases the land underlying a store in Dallas, Texas (which
building is owned by the Company) from 8239 Preston Road, Inc., a Texas
corporation of which George Zimmer, James E. Zimmer and Richard E. Goldman each
own 20% of the outstanding common stock, and Laurie Zimmer, sister of George and
James Zimmer and daughter of Robert E. Zimmer, owns 40% of the outstanding common stock. The Company paid
aggregate rentals on such property to such corporation of $49,200 in 2001.2002. The
lease expires April 30, 2004.
K&G leases its Irving, Texas store from three individuals, including
Mr.
Greenspan.Stephen Greenspan, who chose not to stand for re-election at last year's annual
meeting of shareholders. Pursuant to this arrangement, K&G made lease payments
of $78,000 in fiscal 2001. The lease for this store currently provides that K&G pay rent of
$6,208 per month.2002. The current lease term expires September 30, 2003.
Ellsworth Realty, L.L.C., a limited liability company of which Mr.
Greenspan beneficially owns 50%, leases office space, retail space and a
warehouse in Atlanta, Georgia to K&G. The lease provides for K&G to pay
Ellsworth Realty a specified amount for the warehouse and office space and a
specified amount for the retail space plus 1% of the net sales of the store in
excess of a certain threshold amount. Pursuant to this arrangement, K&G paid or
accrued to Ellsworth Realty approximately $345,000$358,400 in fiscal 2001.2002. The lease
expires December 31, 2005.
G&R Realty, Inc. ("G&R Realty"), of which Mr. Greenspan beneficially owns 50%, leases one
store location in Atlanta, Georgia to K&G. The lease provides for K&G to pay G&R
Realty a specified amount for the retail space plus 1% of the net sales of the
store in excess of a certain threshold amount. Pursuant to this arrangement, K&G
paid or accrued to G&R Realty approximately $97,000$98,800 in fiscal 2001.2002. The lease
expires April 30, 2004.
In January 2000, the Company, through its wholly-owned subsidiary, Renwick
Technologies, Inc. ("Renwick"), formed Chelsea Market Systems, L.L.C.
("Chelsea") with Harry M. Levy, for the purpose of developing a new
point-of-sale software system for the Company and, after successful
implementation, exploring the possibility of marketing the system to third
parties. Mr. Levy was an officer and director of the Company until March 11,
2002. Under the terms of the agreement forming Chelsea, Renwick owned 50% of
Chelsea and Mr. Levy owned 50% with the understanding that Mr. Levy would
assign, either directly or indirectly through another legal entity, some of his
interest in Chelsea to other persons who would work on the project. The
point-of-sale system has been developed and successfully deployed by the
Company. On March 31, 2002, Chelsea sold substantially all of its assets to an
unrelated company regularly engaged in the development and licensing of software
to the retail industry. In connection with the sale, a person filed suit
attempting to enjoin the sale and alleging that he owned or was otherwise
entitled to part of Mr. Levy's interest in Chelsea and alleging that the Company
conspired with Mr. Levy to deprive him of such interest. In connection with the
settlement of this suit, Mr. Levy assigned all of his remaining interest in
Chelsea to Renwick and, as a result, no longer has an economic interest in
Chelsea. Through the sale by Chelsea, and after giving effect to the settlement
of the lawsuit, the Company received a net amount approximately equal to its
investment in Chelsea plus the total amount incurred by the Company for
Chelsea's development of the point-of-sale system.
Brittmore Interests, a partnership in which Mr. Levy is a 50% partner,
leases office space in Houston, Texas to Chelsea. Pursuant to this arrangement,
Chelsea made or accrued lease payments of approximately $99,000 in fiscal 2001.
The lease for this office space currently provides that Chelsea pay rent of
$8,245 per month. The lease was assumed by the buyer as part of the
above-described transaction.
Management believes that the terms of the foregoing leasing arrangements
are comparable to what would have been available to the Company from
unaffiliated third parties at the time such leases were entered into.
17
The Company engaged ShangriLa Consulting, Inc. to provide consulting
services, on a non-exclusive basis, to the Company with respect to general
business matters, including internet commerce, for a fee of $20,000 per month
plus reimbursement of certain expenses. Such fees and expenses approximated
$358,000$73,000 during 2001.2002. In October 2001, the Company and Mr. Brutoco mutually
decided to wind down the work being done for the Company by ShangriLa
Consulting, Inc. so thatand such engagement would terminateterminated in April 2002. Mr. Brutoco is
the President and Chief Executive Officer, and, together with his wife, owns
100% of ShangriLa Consulting, Inc.
The Company utilized the services of Regal Aviation L.L.C. ("Regal
Aviation"), which operates a private air charter service, to provide air
transportation from time to time for employees of the Company. During 2001,2002, the
Company paid approximately $617,000$645,000 to Regal Aviation for such services. Regal
Aviation is a limited liability company of which George Zimmer, Robert Zimmer,
James Zimmer Richard Goldman and
David Edwab ownowned an aggregate of 52.5%approximately 30% of the membership interest.interest
during fiscal 2002. The charter rates charged by Regal Aviation are at least as
favorable as can be obtained from independent air charter services.
During 2002, in connection with our share repurchase program, we entered
into and subsequently settled an option contract with Bear, Stearns & Co. Inc.
("Bear Stearns"), of which Sheldon Stein is a Senior Managing Director. The
completion of this contract resulted in the repurchase of 500,000 shares of our
company stock from Bear Stearns.
In December 1996, the Company advanced $166,000 to Mr. Lane to enable him
to purchase a residence. In 2001,At the beginning of fiscal 2002 Mr. Lane had a balance
of $119,654 and, prior to June 2002, took further advances of $572,116 on this
loan. During 2002, Mr. Lane repaid $526,539 of these advances and paid the
Company $5,964$14,089 in interest
on this advance at an average rate of 4.8%4.9% per annum, and hadresulting in
an outstanding balance of $120,000$165,231 as of February 2, 2002.1, 2003.
18
In April 2002, the Company advanced $220,750 to Mr. Davis to enable him to
purchase a residence. During 2002, this advance accrued $5,519 in interest at an
average rate of 3.0% per annum, resulting in an outstanding balance of $226,269
on this advance as of February 1, 2003.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To the Company's knowledge, and except as set forth below, based solely on
a review of the copies of the reports required pursuant to Section 16(a) of the
Exchange Act that have been furnished to the Company and written representations
that no other reports were required, during the fiscal year ended February 2,
2002,1,
2003, all Section 16(a) filing requirements applicable to its directors,
executive officers and greater than 10% beneficial owners have been met, except
that JamesGeorge Zimmer inadvertently failed to timely file a Form 4 related to the
salepurchase of Common Stock.
18
100 shares of the Company's common stock as a part of the ceremony
on the date the Company's common stock was listed on the New York Stock
Exchange.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed the firm of Deloitte & Touche LLP
("D&T") as independent auditors for the fiscal year ending February 1, 2003January 31, 2004
subject to ratification by the shareholders at the Annual Meeting.
Representatives of D&T are expected to attend the Annual Meeting, will be
afforded an opportunity to make a statement if they desire to do so, and will be
available to respond to appropriate questions by shareholders.
AUDIT FEES
In aggregate, D&T fees incurred for professional services rendered in the
audit of the Company's annual consolidated financial statements for the fiscal
year ended February 2, 2002 and in reviewing interim consolidated financial
statements, as included in quarterly reports for 2001 on Form 10-Q, were
$207,500.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
In aggregate, D&T billed the Company $711,000 in fees for all financial
information systems design and implementation services rendered by D&T in 2001.
These services consisted of routine consulting in the implementation of a
financial information management system. The Audit Committee has considered
whether services provided by D&T to the Company in the areas of financial
information systems design and implementation are compatible with D&T's
independence.
ALL OTHER FEES
The aggregate fees billed by Deloitte & Touche for services rendered to the
Company, other than the services discussed above under "Audit Fees" and
"Financial Information Systems Design and Implementation Fees", in fiscal 2001
were $422,500, including audit related services of approximately $23,500 and
non-audit services of $399,000.
FISCAL YEAR
---------------------
2002 2001
-------- ----------
AUDIT FEES.................................................. $244,000 $ 207,500
AUDIT RELATED FEES(1)....................................... 21,600 23,500
TAX FEES(2)................................................. 324,200 399,000
ALL OTHER FEES(3)........................................... 167,400 711,000
-------- ----------
$757,200 $1,341,000
======== ==========
- ---------------
(1) Audit related services includerepresent fees for audits of the Company's employee
benefit plans and routine consulting on various
financial reporting matters. Non-auditplans.
(2) Tax services include fees for a variety of federal, state and international
tax consulting projects and tax compliance services.
(3) In 2001, these services consisted of routine consulting in the
implementation of a financial information management system. In 2002, these
services consisted of general financial information management system
consultation and insurance claim services related to the events of September
11, 2001.
The Audit Committee has considered whether non-audit services provided by
Deloitte & ToucheD&T to the Company in the area of non-audit services are compatible with maintaining Deloitte & Touche'sD&T's independence.
The Audit Committee has implemented pre-approval policies and procedures
for all audit and non-audit services. Generally, the Audit Committee requires
pre-approval of any services to be provided by the Company's independent public
accountants to the Company or any of its affiliates. The pre-approval procedures
include the designation of such pre-approval responsibility to one individual on
the Audit Committee, currently Mr. Stein. The Audit Committee was not required
to pre-approve services in 2002 as the new requirements were not effective until
May 6, 2003.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS OF THE COMPANY.
19
PROPOSALS FOR NEXT ANNUAL MEETING
Any proposals of shareholders intended to be presented at the annual
meeting of shareholders of the Company to be held in 20032004 must be received by
the Company at its corporate offices, 5803 Glenmont Drive, Houston, Texas 77081,
or via facsimile at (713) 592-7060, no later than January 24, 2003,31, 2004, in order to
be considered for inclusion in the proxy statement and form of proxy relating to
that meeting.
OTHER MATTERS
The management of the Company knows of no other matters which may come
before the meeting. However, if any matters other than those referred to above
should properly come before the meeting, it is the intention of the persons
named in the enclosed proxy to vote such proxy in accordance with their best
judgment.
The cost of solicitation of proxies in the accompanying form will be paid
by the Company. In addition to solicitation by use of the mails, certain
directors, officers or employees of the Company may solicit the return of
proxies by telephone, telegram or personal interview.
1920
APPENDIX A
THE MEN'S WEARHOUSE, INC.
CHARTER OF THE AUDIT COMMITTEE
The purpose of the Audit Committee of the Board is to assist the Board and
as required by law, regulation and Board directive, act on behalf of the Board,
in its oversight of the integrity of the Company's financial statements, the
Company's compliance with legal and regulatory requirements, the engagement of
the Company's independent auditors and their qualifications and independence,
and the performance of the Company's internal audit function and independent
auditors, in addition to preparing the report the SEC rules require be included
in the Company's annual proxy statement. This Charter sets out the structure and
responsibilities of the Audit Committee.
I. STRUCTURE AND QUALIFICATIONS
The Audit Committee shall consist of at least three directors all of whom
shall be independent and all of whom shall be able to read and understand
fundamental financial statements, including the Company's balance sheet, income
statement, and cash flow statement. The Chair of the Audit Committee shall have
such accounting, financial or other experience as shall be required by the rules
of the Securities and Exchange Commission and by the New York Stock Exchange.
To be considered independent the director must meet the following criteria:
1. Not have any affiliation with the Company or its subsidiaries
except as a director and a member of a committee of the Board.
2. Not be, or have been in the past five years, an officer, employee,
or an affiliate (other than as a result of being a director) of the Company
or any of its affiliates.
3. Not have any relationship which, in the opinion of the Board, would
interfere with the exercise of independent judgment in carrying out the
responsibilities of a director.
4. Not be a member of the immediate family of an individual who is, or
has been in any of the past five years, employed by the Company or any of
its affiliates as an executive officer.
5. Not be, or have been in the past five years, affiliated with or
employed by a present or former auditor of the Company.
6. Not be a partner, controlling shareholder, or executive officer of
an organization that has a business relationship with the Company and not
be a person who has a direct business relationship with the Company, unless
the Board affirmatively determines in its business judgment that the
relationship does not interfere with the director's exercise of independent
judgment. In making a determination regarding the independence of a
director pursuant to this paragraph, the Board shall consider, among other
things, the materiality of the relationship to the Company, to the
director, and, if applicable, to the organization with which the director
is affiliated.
"Business relationships" can include commercial, industrial, banking,
consulting, legal, accounting, charitable, familial, and other
relationships. The director may serve on the Audit Committee without the
above-referenced Board determination after five years following the
termination of, as applicable, either (1) the relationship between the
organization with which the director is affiliated and the Company, (2) the
relationship between the director and his or her partnership status,
shareholder interest or executive officer position, or (3) the direct
business relationship between the director and the Company.
7. Is not, or has not been for the past five years, an executive or
part of an interlocking directorate of another entity where any of the
Company's executives serve on that entity's compensation committee.
If a director meets the independence criteria, but holds 20% or more of the
Company's stock, or is a general partner, controlling shareholder, or officer of
any such holder, then that director may serve as an Audit
A-1
Committee member but shall not serve as the Audit Committee Chair or be a voting
member of the Audit Committee.
If an Audit Committee member simultaneously serves on the audit committee
of more than three public companies, then the Board must determine that such
simultaneous service would not impair the ability of such member to effectively
serve on the Company's audit committee and disclose such determination in the
annual proxy statement.
Additionally, the Audit Committee Chair shall have past employment
experience in finance or accounting, requisite professional certification in
accounting, or other comparable experience or background which results in the
individual's financial sophistication.
II. MEETINGS
The Audit Committee shall meet at least four times a year. One of such
meetings shall immediately proceed the completion and release of the annual
financial results of the Company and one of such meetings shall be subsequent to
such release and shall receive any applicable report by the Company's
independent auditors with respect to the prior year's audit and shall review and
approve the audit plan for the current fiscal year. Both of such meetings shall
include representatives of the independent auditors and shall include an
opportunity for the Committee to meet with the independent auditors separately
from management.
III. RESPONSIBILITIES
1. Review the accounting policies, procedures, and practices of the
Company, including critical accounting policies and practices, internal
accounting systems and financial reporting processes and procedures with
management and with the Company's independent auditors and review any issues
identified by management or the independent auditors regarding accounting and
financial policies and procedures and any alternative treatment of financial
information discussed by management and the independent auditors, including the
treatment preferred by the independent auditors.
2. Review and discuss the annual financial statements and quarterly
financial statements of the Company with management and the independent auditors
prior to release to the public, including in such review an inquiry as to the
independent auditors' characterization of the accounting principles selected by
management and judgments made by management material to the presentation of such
financial statement.
3. Obtain and review, at least annually, a formal written statement from
the Company's independent auditors delineating: (a) the independent auditors'
internal quality-control procedures; (b) any material issues raised by the most
recent internal quality-control review, or peer review, of the firm, or by any
inquiry or investigation by governmental or professional authorities, within the
preceding five years, respecting one or more independent audits carried out by
the firm, and any steps taken to deal with any such issues; and (c) all
relationships between the independent auditor and the Company.
4. Possess the sole authority to select, evaluate, retain, and, when
appropriate, terminate the independent auditors. In connection with such
selections, advise the independent auditors that they are ultimately accountable
to the Board and the Committee. Approve in advance all audit and non-audit
engagements of the independent auditors. The Committee may delegate advance
approval of such engagements to a member thereof provided such approvals are
reviewed with the Committee at its next meeting.
5. Review any accounting changes which have a material impact on the
obligations or financial statements of the Company; review filings made with the
Securities and Exchange Commission as required; and hold such other conferences
or undertake such other reviews with management and with the independent
auditors as the Committee may deem appropriate or as the independent auditors
may request.
6. Inquire of management and the independent auditors to assure that the
independent auditors have not engaged in any prohibited activities within the
provisions of section 10 A (g) of the Securities Exchange Act of 1934.
A-2
7. Discuss with management of the Company the Company's philosophy and
approach to earnings press releases, as well as to financial information and
earnings guidance provided to analysts and rating agencies, including the type
of information to be disclosed and the type of presentations to be made.
8. Obtain advice and assistance from outside legal, accounting, or other
advisors, as appropriate. Pursuant to approval of this Charter, no further
requirement of Board approval for such engagements is required.
9. Discuss policies with respect to risk assessment and risk management.
10. Meet separately with management, with internal auditors or other
personnel responsible for the internal audit function, and with independent
auditors.
11. Review with the independent auditor any audit problems or difficulties
and management's response and obtain from the independent auditors copies of all
written communications to management of the Company in any way related to the
Company's financial statements or reports or the integrity of the Company's
financial books, records, practices or procedures.
12. Set hiring policies for employees or former employees of the
independent auditors.
13. Report regularly to the Board and review with the Board any issues
relating to the quality or integrity of the Company's financial statements, the
Company's compliance with legal or regulatory requirements, the performance and
independence of the Company's independent auditors, or the performance of the
internal audit function.
14. Conduct an annual review of the work of the Audit Committee, including
review of: (a) major issues regarding accounting principles and financial
statement presentations, including any significant changes in the Company's
selection or application of accounting principles, and major issues as to the
adequacy of the Company's internal controls and any special audit steps adopted
in light of material control deficiencies; (b) analyses prepared by management
and/or the independent auditor setting forth significant financial reporting
issues and judgments made in connection with the preparation of the financial
statements, including analyses of the effects of alternative GAAP methods on the
financial statements; (c) the effect of regulatory and accounting initiatives,
as well as off-balance sheet structures on the financial statements of the
Company; and (d) earnings press releases, paying particular attention to any use
of "pro forma," or "adjusted" non-GAAP, information, as well as financial
information and earnings guidance provided to analysts and rating agencies.
15. Establish procedures for the receipt, retention, and treatment of
complaints regarding accounting, internal accounting controls and auditing
matters and for the confidential, anonymous submission by employees of the
Company of concern regarding questionable accounting or auditing matters.
16. Approve all transactions between the Company and its executive officers
and directors, including transactions with affiliates of executive officers or
directors, other than compensation arrangements approved by the Compensation
Committee of the Board, employee benefit arrangements made available generally
to the employees, and compensation of directors.
17. Review and annually approve a code of ethics for the senior financial
officer of the Company as required by section 406 of the Sarbanes-Oxley Act of
2002.
18. Review as the Committee deems appropriate policies, procedures and
practices dealing with risk management, including derivative policies and
insurance programs.
IV. COMPENSATION
Director's and Board Committee fees are the only compensation an Audit
Committee member may receive from the Company. If a director satisfies the
definition of an independent director, then his or her receipt of a pension or
other form of deferred compensation from the Company for prior service, provided
such compensation is not contingent in any way on continued service, will not
preclude him or her from satisfying the requirement that director's fees are the
only form of compensation he or she receives from the Company.
A-3
PROXY PROXY
THE MEN'S WEARHOUSE, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 25, 2002JULY 1, 2003
The undersigned shareholder of The Men's Wearhouse, Inc. (the
"Company") hereby appoints George Zimmer and David Edwab, or either of them,
attorneys and proxies of the undersigned, with full power of substitution to
vote, as designated below, the number of votes which the undersigned would be
entitled to cast if personally present at the Annual Meeting of Shareholders of
the Company to be held at 11:00 a.m., pacific daylight time, on Tuesday, June 25, 2002,July 1,
2003, at The Westin St. Francis, 335 Powell Street, San Francisco, California,
and at any adjournment or adjournments thereof.
-------------
SEE(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE
-------------SIDE)
[X] Please mark your
votes as in this
example.
1. Election of FOR ALL NOMINEES WITHHOLD NOMINEES: George Zimmer
Directors LISTED, EXCEPT AS AUTHORITY TO VOTE David H. Edwab
INDICATED TO THE FOR ELECTION OF ALL Rinaldo S. Brutoco
CONTRARY BELOW NOMINEES Michael L. Ray, Ph.D.
[ ] [ ] Sheldon I. Stein
Kathleen Mason
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, WRITE THAT PERSON'S NAME IN THE
SPACE PROVIDED BELOW.)
- ---------------------------------------------------ANNUAL MEETING OF SHAREHOLDERS OF
THE MEN'S WEARHOUSE, INC.
July 1, 2003
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach and mail in the envelope provided.
- --------------------------------------------------------------------------------
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR
VOTE IN BLUE OR BLACK INK AS SHOWN HERE [x]
- --------------------------------------------------------------------------------
1. Election of Directors:
NOMINEES:
[ ] FOR ALL NOMINEES O George Zimmer
O David H. Edwab
[ ] WITHHOLD AUTHORITY O Rinaldo S. Brutoco
FOR ALL NOMINEES O Michael L. Ray, Ph.D.
O Sheldon I. Stein
[ ] FOR ALL EXCEPT O Kathleen Mason
(See instructions below)
INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you
wish to withhold, as shown here: O
- ------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Proposal regarding a code of conduct [ ] [ ] [ ]
based on the United Nation's International
Labor Organization's Standards for
Workers Rights. [ ] [ ] [ ]
3. Proposal to ratify the appointment of [ ] [ ] [ ]
Deloitte & Touche LLP as independent auditors. [ ] [ ] [ ]
4. In their discretion, the above-named proxies are authorized to vote upon such
other matters as may properly come before the meeting or any adjournment
thereof and upon matters incident to the conduct of the meeting.
This Proxy will be voted as directed. IF NOT OTHERWISE SPECIFIED, THE SHARES
WILL BE VOTED FOR EACH OF THE NOMINEES LISTED HEREIN, AGAINST PROPOSAL 2 AND FOR
PROPOSAL 3. As noted in the accompanying proxy statement, receipt of which is
hereby acknowledged, if any of the listed nominees becomes unavailable for any
reason and authority to vote for election of directors is not withheld, the
shares will be voted for another nominee or other nominees to be selected by the
Board of Directors.
PLEASE MARK, SIGN, DATE AND RETURN IMMEDIATELY
- --------------------------------------------------------------------------------
To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that [ ]
changes to the registered name(s) on the account may not be submitted via
this method.
- --------------------------------------------------------------------------------
Signature of Shareholder __________________ Date: _____________ Signature of Shareholder __________________ Date: _____________
Note: Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give full
title as such. If the signer is a corporation, please sign full corporate
name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.
THE MEN'S WEARHOUSE, INC.
PROXY VOTING INSTRUCTIONS
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JULY 1, 2003
The Board of Directors of The Men's Wearhouse, Inc. (the "Company")
recommends a vote "FOR" each of the nominees listed below, "AGAINST" Proposal 2
and "FOR" Proposal 3. Please provide voting instructions by marking your choices
below.
1. Election of Directors:
[ ] FOR all nominees listed, except as indicated to [ ] WITHHOLD AUTHORITY to vote for election of all
the contrary below nominees
Nominees: George Zimmer, David H. Edwab, Rinaldo S. Brutoco, Michael L. Ray,
Ph.D., Sheldon I. Stein and Kathleen Mason.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT PERSON'S NAME IN THE SPACE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
2. Proposal regarding a code of conduct based on the United Nation's
International Labor Organization's Standards for Workers Rights.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued, and to be signed on reverse side)
3. Proposal to ratify the appointment of Deloitte & Touche LLP as independent
auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The shares allocated to your account in the Company's 401(k) Savings Plan
will be voted as directed. IF NOT OTHERWISE SPECIFIED, THE SHARES WILL BE VOTED
FOR EACH OF THE NOMINEES, AGAINST PROPOSAL 2 AND FOR PROPOSAL 3. As noted in the
accompanying proxy statement, receipt of which is hereby acknowledged, if any of
the listed nominees becomes unavailable for any reason and authority to vote for
election of directors is not withheld, the shares will be voted for another
nominee or other nominees to be selected by the Board of Directors.
PLEASE MARK, SIGN, DATE AND RETURN IMMEDIATELY
Dated: , 2003
------------------------------------
-----------------------------------------------
-----------------------------------------------
Signature of Shareholder Dated 2002
------------------------------------------ --------------,
Your signature should correspond with your name
as it appears hereon. Joint owners should each
sign. When signing as attorney, executor,
administrator, trustee or guardian, please set
forth your full title as it appears hereon.
PLEASE MARK, SIGN, DATE AND RETURN IMMEDIATELY
THE MEN'S WEARHOUSE, INC.
PROXY VOTING INSTRUCTIONS
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 25, 2002JULY 1, 2003
The Board of Directors of The Men's Wearhouse, Inc. (the "Company")
recommends a vote "FOR" each of the nominees listed below, "AGAINST" Proposal 2
and "FOR" Proposal 3. Please provide voting instructions by marking your choices
below.
1. Election of Directors:
[ ] FOR all nominees listed, except as indicated to [ ] WITHHOLD AUTHORITY to vote for election of all
the contrary below nominees
Nominees: George Zimmer, David H. Edwab, Rinaldo S. Brutoco, Michael L. Ray,
Ph.D., Sheldon I. Stein and Kathleen Mason.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT PERSON'S NAME IN THE SPACE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
2. Proposal regarding a code of conduct based on the United Nation's
International Labor Organization's Standards for Workers Rights.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued, and to be signed on reverse side)
3. Proposal to ratify the appointment of Deloitte & Touche LLP as independent
auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The shares allocated to your account in the Company's Employee Stock Plan
will be voted as directed. IF NOT OTHERWISE SPECIFIED, THE SHARES WILL BE VOTED
FOR EACH OF THE NOMINEES LISTED HEREIN, AGAINST PROPOSAL 2 AND FOR PROPOSAL 3.
As noted in the accompanying proxy statement, receipt of which is hereby
acknowledged, if any of the listed nominees becomes unavailable for any reason
and authority to vote for election of directors is not withheld, the shares will
be voted for another nominee or other nominees to be selected by the Board of
Directors.
Dated: 2002
----------------------------------, 2003
------------------------------------
-----------------------------------------------
-----------------------------------------------
Signature of Shareholder
Your signature should correspond with your name
as it appears hereon. Joint owners should each
sign. When signing as attorney, executor,
administrator, trustee or guardian, please set
forth your full title as it appears hereon.
PLEASE MARK, SIGN, DATE AND RETURN IMMEDIATELY
THE MEN'S WEARHOUSE, INC.
PROXY VOTING INSTRUCTIONS
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 25, 2002JULY 1, 2003
The Board of Directors of The Men's Wearhouse, Inc. (the "Company")
recommends a vote "FOR" each of the nominees listed below, "AGAINST" Proposal 2
and "FOR" Proposal 3. Please provide voting instructions by marking your choices
below.
1. Election of Directors:
[ ] FOR all nominees listed, except as indicated to [ ] WITHHOLD AUTHORITY to vote for election of all
the contrary below nominees
Nominees: George Zimmer, David H. Edwab, Rinaldo S. Brutoco, Michael L. Ray,
Ph.D., Sheldon I. Stein and Kathleen Mason.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT PERSON'S NAME IN THE SPACE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
2. Proposal regarding a code of conduct based on the United Nation's
International Labor Organization's Standards for Workers Rights.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued, and to be signed on reverse side)
3. Proposal to ratify the appointment of Deloitte & Touche LLP as independent
auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The shares allocated to your account in the Company's Employee Stock
Discount Plan will be voted as directed. IF NOT OTHERWISE SPECIFIED, THE SHARES
WILL BE VOTED FOR EACH OF THE NOMINEES LISTED HEREIN, AGAINST PROPOSAL 2 AND FOR
PROPOSAL 3. As noted in the accompanying proxy statement, receipt of which is
hereby acknowledged, if any of the listed nominees becomes unavailable for any
reason and authority to vote for election of directors is not withheld, the
shares will be voted for another nominee or other nominees to be selected by the
Board of Directors.
Dated: 2002
----------------------------------, 2003
------------------------------------
-----------------------------------------------
-----------------------------------------------
Signature of Shareholder
Your signature should correspond with your name
as it appears hereon. Joint owners should each
sign. When signing as attorney, executor,
administrator, trustee or guardian, please set
forth your full title as it appears hereon.
PLEASE MARK, SIGN, DATE AND RETURN IMMEDIATELY
THE MEN'S WEARHOUSE, INC.
PROXY VOTING INSTRUCTIONS
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 25, 2002
The Board of Directors of The Men's Wearhouse, Inc. (the "Company")
recommends a vote "FOR" each of the nominees listed below, "AGAINST" Proposal 2
and "FOR" Proposal 3. Please provide voting instructions by marking your choices
below.
1. Election of Directors:
[ ] FOR all nominees listed, except as indicated to [ ] WITHHOLD AUTHORITY to vote for election of all
the contrary below nominees
Nominees: George Zimmer, David H. Edwab, Rinaldo S. Brutoco, Michael L. Ray,
Ph.D., Sheldon I. Stein and Kathleen Mason.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT PERSON'S NAME IN THE SPACE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
2. Proposal regarding a code of conduct based on the United Nation's
International Labor Organization's Standards for Workers Rights.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued, and to be signed on reverse side)
3. Proposal to ratify the appointment of Deloitte & Touche LLP as independent
auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The shares allocated to your account in the Company's 401(k) Savings Plan
will be voted as directed. IF NOT OTHERWISE SPECIFIED, THE SHARES WILL BE VOTED
FOR EACH OF THE NOMINEES, AGAINST PROPOSAL 2 AND FOR PROPOSAL 3. As noted in the
accompanying proxy statement, receipt of which is hereby acknowledged, if any of
the listed nominees becomes unavailable for any reason and authority to vote for
election of directors is not withheld, the shares will be voted for another
nominee or other nominees to be selected by the Board of Directors.
Dated: 2002
----------------------------------,
-----------------------------------------------
-----------------------------------------------
Signature of Shareholder
Your signature should correspond with your name
as it appears hereon. Joint owners should each
sign. When signing as attorney, executor,
administrator, trustee or guardian, please set
forth your full title as it appears hereon.
PLEASE MARK, SIGN, DATE AND
RETURN IMMEDIATELY