SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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[X] Definitive Proxy Statement
[_] Definitive Additional Materials
Syms Corp.
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(Name of Registrant as Specified In Its Charter)
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SYMS CORP
SYMS WAY
SECAUCUS, NEW JERSEY 07094
June 11, 2004
Dear Shareholder:
You are cordially invited to attend the 2004 Annual Meeting of Shareholders
of Syms Corp (the "Company") which will be held on July 15, 2004, at 10:30 a.m.
at the offices of the Company.
Information about the meeting and the various matters on which the
shareholders will act is included in the Notice of Annual Meeting of
Shareholders and Proxy Statement which follow. Also included is a proxy card and
postage paid return envelope.
It is important that your shares be represented at the meeting. Whether or
not you plan to attend, we hope that you will complete and return your Proxy
Card in the enclosed envelope as promptly as possible.
Sincerely,
Marcy Syms
Chief Executive Officer
SYMS CORP
-----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
JULY 15, 2004
To the Shareholders:
Notice is hereby given that the Annual Meeting of Shareholders of Syms Corp
will be held at the office of the Company at Syms Way, Secaucus, New Jersey
07094, on Thursday, July 15, 2004 at 10:30 a.m. for the following purposes:
1. To elect six (6) Directors to serve for the term of one (1) year or
until their respective successors have been elected and qualified.
2. To ratify the appointment of BDO Seidman, LLP as independent
accountants of the Company for the fiscal year ending February 26, 2005.
3. To vote on a Shareholder Proposal requesting indexed options, if
properly presented at the meeting.
4. To transact such other business as may properly come before the
meeting and any adjournment(s) or postponement(s) thereof.
The Board of Directors recommends a vote FOR items 1 and 2 and a vote
AGAINST item 3.
The foregoing items of business are described more fully in the Proxy
Statement accompanying this notice.
The close of business on June 11, 2004 has been fixed by the Board of
Directors as the record date for the determination of shareholders entitled to
notice of, and to vote at, the meeting and only shareholders of record at such
time will be so entitled to vote.
You are cordially invited to attend the meeting in person if possible.
Please sign and date the enclosed proxy and return it in the envelope enclosed
for this purpose, whether or not you plan to attend the meeting. It will assist
us in keeping down the expenses of the meeting if shareholders return their
signed proxies promptly, whether they own a few shares or many shares.
By Order of the Board of Directors
Antone F. Moreira
Assistant Secretary
Secaucus, New Jersey
June 11, 2004
SYMS CORP
SYMS WAY
SECAUCUS, NEW JERSEY 07094
PROXY STATEMENT
FOR ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD
ON JULY 15, 2004
INTRODUCTION
This Proxy Statement and enclosed proxy card are being furnished in
connection with the solicitation by the Board of Directors of Syms Corp, a New
Jersey corporation (the "Company"), of proxies for use at the July 15, 2004
Annual Meeting of the Shareholders of the Company or at any adjournment(s) or
postponement(s) thereof (the "Annual Meeting") for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders. The Annual Meeting will
be held at the Company's executive offices located at Syms Way, Secaucus, New
Jersey 07094. The cost of preparing and mailing the proxy and this Proxy
Statement and all other costs in connection with this solicitation of proxies
will be borne by the Company. It is anticipated that the accompanying proxy and
this Proxy Statement will be sent to shareholders of the Company on or about
June 11, 2004.
Proxies in the accompanying form which are properly executed and duly
returned to the Company and not revoked will be voted as specified. Any proxy in
which no direction is specified will be voted FOR the election of the nominees
for director, FOR the ratification of the appointment of BDO Seidman, LLP as
independent accountants, and AGAINST the shareholder proposal regarding indexed
stock options (collectively the "Proposals"), and in the discretion of the
proxies named on the proxy card with respect to any other matters properly
brought before the meeting and any adjournment(s) or postponement(s) thereof.
Each proxy granted is revocable and may be revoked at any time prior to its
exercise, by notifying American Stock Transfer & Trust Co., 59 Maiden Lane, New
York, NY 10038 in writing, by executing a subsequent proxy or by electing to
vote in person at the Annual Meeting. Mere attendance at the Annual Meeting will
not serve to revoke a proxy. The Company intends to reimburse brokerage
companies and others for forwarding proxy materials to beneficial owners of
shares.
Only shareholders of record of the Company's voting securities as of the
close of business on June 11, 2004 are entitled to notice of and to vote at the
Annual Meeting. As of the record date, 15,099,878 shares of common stock, par
value $.05 per share ("Common Stock"), were outstanding. Each share of Common
Stock entitles the record holder thereof to one vote on each of the Proposals
and on all other matters properly brought before the Annual Meeting.
Concurrently with the mailing of this Proxy Statement, the Company is mailing
its Annual Report for its fiscal year ended February 28, 2004 to shareholders of
record on June 11, 2004.
Shareholders vote at the Annual Meeting by casting ballots (in person or by
proxy) which are tabulated by a representative of the Company's independent
transfer agent appointed to serve as Inspector of Election at the meeting and
who has executed and verified an oath of office. The holders of a majority of
the shares of Common Stock issued and outstanding represented in person or by
proxy shall constitute a quorum. The affirmative vote of a plurality of the
votes cast at the Annual Meeting is sufficient to elect a director. The
affirmative vote of a majority of the votes cast at the Annual Meeting is
required to ratify the appointment of BDO Seidman LLP as the Company's
independent public accountants. The affirmative vote of a majority of the votes
cast at the Annual Meeting is required to ratify the shareholder proposal
regarding indexed options. Abstentions and broker non-votes are included in the
determination of the number of shares present at the Annual Meeting for quorum
purposes but not counted in the tabulations of the votes cast on proposals
presented to shareholders.
1
ELECTION OF DIRECTORS
PROPOSAL 1
At the Annual Meeting, all six directors of the Company are to be elected
for the term of one year or until their respective successors have been elected
and qualified. It is intended that votes will be cast pursuant to proxies
received from holders of Common Stock of the Company for the nominees listed
below, unless the proxy contains contrary instructions. The affirmative vote of
a plurality of the votes cast at the meeting is necessary for the election of
directors.
If any of the nominees listed below is unavailable for election at the date
of the Annual Meeting, the shares represented by the proxy will be voted for the
remaining nominees and for such substitute nominee or nominees as the Board of
Directors, in their judgment, designate. The Company at this time has no reason
to believe that any of such nominees will decline or be unable to serve if
elected.
Mr. David A. Messer, who has been a Director of the Company since 1996, has
recently notified the Board of Directors that he will not stand for re-election
at the Annual Meeting. Based upon the recommendation of the Nominating &
Corporate Governance Committee, the Board of Directors nominated Amber M.
Brookman to fill the vacancy created by Mr. Messer not standing for re-election
at the Annual Meeting.
Background information with respect to the Board of Directors and nominees
for election as directors, all of whom, except for Amber Brookman, are incumbent
directors, appears below. Except for Marcy Syms, who is the daughter of Sy Syms,
there is no family relationship between any nominee and any other nominee or
executive officer of the Company. See "Security Ownership of Certain Beneficial
Owners and Management" for information regarding such person's holding of equity
securities of the Company.
NAME OF DIRECTOR OR NOMINEE FOR ELECTION AGE DIRECTOR SINCE POSITION
---------------------------------------- --- -------------- --------
Sy Syms (1)(2)(5)(6).......................... 78 1983 Chairman of the Board and Director of
the Company
Marcy Syms (1)(2)(5)(6)....................... 53 1983 Chief Executive Officer/President and
Director of the Company
Antone F. Moreira............................. 67 1997 Vice President, Treasurer and Chief
Financial Officer, Assistant Secretary
and Director of the Company
Harvey A. Weinberg (3)(4)..................... 66 1992 Director of the Company
Amber M. Brookman............................. 62 N/A N/A
David A. Messer (3)(4)(7)..................... 42 1996 Director of the Company
Wilbur L. Ross, Jr. (3)(4).................... 66 1983-1999; Director of the Company
2000
-----------------------
(1) Member of the Executive Committee of the Company.
(2) Sy Syms is the father of Marcy Syms.
(3) Member of the Stock Option Committee of the Company.
(4) Member of the Audit Committee of the Company.
(5) Member of the Nominating & Corporate Governance Committee of the Company.
(6) Member of the Compensation Committee of the Company.
(7) Mr. Messer's term as Director of the Company expires as of July 15, 2004.
Mr. Messer will not be standing for re-election at the Annual Meeting.
2
NOMINEES FOR ELECTION AS DIRECTOR
The following individuals are nominees for director at the Annual Meeting:
SY SYMS has been Chairman of the Board, Chief Executive Officer and a
Director of the Company and/or its predecessors since 1959. Mr. Syms was Chief
Operating Officer of the Company from 1983 to 1984. Mr. Syms has been a Director
of Israel Discount Bank of New York since December 1991. On January 22, 1998,
Mr. Syms resigned from his position as Chief Executive Officer. Since that date,
Mr. Syms has been Chairman of the Board. Mr. Syms is Marcy Syms father.
MARCY SYMS has been President and a Director of the Company since 1983 and
Chief Operating Officer of the Company since 1984. On January 22, 1998, Marcy
Syms was named Chief Executive Officer/President. Marcy Syms is Sy Syms'
daughter.
ANTONE F. MOREIRA has been Vice President, Chief Financial Officer,
Treasurer and Assistant Secretary of Syms Corp since May 1997. From 1996 to May
1997, Mr. Moreira was a financial consultant with Equitable Assurance Society, a
financial services organization. From 1990 to 1995, Mr. Moreira was Executive
Vice President and Chief Financial Officer of Stuarts Department Stores, Inc., a
regional discount department store chain operating in New England. Mr. Moreira
has been a Director of the Company since May 1997.
HARVEY A. WEINBERG has been a consultant in various industries since April
1994. From April 1992 to April 1994, he was President and Chief Executive
Officer of HSSI, Inc., a retailer of men's and women's apparel. From 1987 to
September 1990, he was Chief Executive Officer and Vice Chairman of the Board of
Directors of Hartmarx Corporation and from 1990 to September 1992, he served as
Chairman of such Board of Directors. He is a trustee of Glimcher Realty Trust, a
real estate investment trust. He is also a Director of R.G. Barry Corp. He has
been a Director of the Company since 1992.
AMBER M. BROOKMAN has been President and CEO of Brookwood Companies for the
past fourteen years. Brookwood Companies is a textile and apparel company. Ms.
Brookman manages the activities of five divisions of Brookwood, as well as its
wholly owned subsidiaries Brookwood Laminating, Kenyon Industries, Inc.,
XtraMile and Solutions 4.
WILBUR L. ROSS, JR. has been a principal of W L Ross & Company LLC since
2000. Mr. Ross was Managing Director of Rothchild, Inc. from 1976 to 1999. He
was a Director of the Company from 1983 through March 1999 and was reappointed
Director in October 2000.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
ELECTION OF EACH NOMINEE FOR DIRECTOR NAMED ABOVE. PROXIES SOLICITED HEREBY WILL
BE VOTED FOR EACH NOMINEE NAMED ABOVE UNLESS A VOTE AGAINST A NOMINEE OR AN
ABSTENTION IS SPECIFICALLY INDICATED.
3
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the Company's fiscal year ended February 28, 2004 there were four
meetings of the Board of Directors. Each director attended all of the fiscal
2003 meetings of the Board of Directors and the committees of which he or she
was a member during the 2003 fiscal year, except one Director missed a Board of
Director's meeting during this fiscal year.
Based on information supplied to it by the Directors, the Board of
Directors has affirmatively determined that each of Harvey A. Weinberg, David A.
Messer and Wilbur L. Ross, Jr. are "independent" under the listing standards of
the New York Stock Exchange and the rules and regulations promulgated by the
Securities and Exchange Commission (the "SEC"). The Board of Directors has
further determined that Amber M. Brookman, if elected, would be "independent"
under the listing standards of the New York Stock Exchange ("NYSE") and the
rules and regulations promulgated by the Securities and Exchange Commission. The
Board of Directors has made such determinations based on the fact that none of
such persons have had, or currently have any material relationship with the
Company or its affiliates or any executive officer of the Company or his or her
affiliates, that would currently impair their independence, including, without
limitation, any commercial, industrial, banking, consulting, legal, accounting,
charitable or familial relationship.
The Board of Directors has determined that the Company is a "controlled
company" (as defined in the NYSE listing standards) based on the fact that more
than 50% of the voting power of the Company's voting stock is held by a group
comprised of Sy Syms, individually and as trustee of The Sy Syms Revocable
Living Trust, dated March 17, 1989, as amended, and Marcy Syms, individually and
as trustee of The Laura Merns Living Trust, dated February 14, 2003. As a
result, the Company is exempt from the provisions of the NYSE listing standards
requiring that (i) a majority of the board consist of independent directors,
(ii) the nominating committee be composed entirely of independent directors and
(iii) the compensation committee be composed entirely of independent directors.
The Committees of the Board of Directors include an Audit Committee, an
Executive Committee, a Stock Option Committee, a Compensation Committee and a
Nominating & Corporate Governance Committee.
The Audit Committee has the principal function of reviewing the adequacy of
the Company's internal system of accounting controls, conferring with the
independent certified public accountants concerning the scope of their
examination of the books and records of the Company and their audit and
non-audit fees, recommending to the Board of Directors the appointment of
independent certified public accountants, reviewing and approving related party
transactions and considering other appropriate matters regarding the financial
affairs of the Company. The Board of Directors had adopted a written charter
setting out the functions of the Audit Committee, a copy of which is attached to
this Proxy Statement as Appendix A, which will be available on the Company's
website at www.syms.com and is available in print to any shareholder who
requests it, in writing to the Company's Assistant Secretary, Syms Corp, Syms
Way, Secaucus, New Jersey 07094. The current members of the Audit Committee are
Harvey A. Weinberg (Chairman), David A. Messer and Wilbur L. Ross, Jr., none of
whom is, or has ever been, an officer or employee of the Company and are all
considered "independent" for the purposes of the New York Stock Exchange listing
standards. In addition to meeting the independence standards of the NYSE, each
member of the Audit Committee is financially literate and meets the independence
standards established by the SEC. The Board of Directors has also determined
that Wilbur L. Ross, Jr. has the requisite attributes of an "audit committee
financial expert" as defined by regulations of the SEC and that such attributes
were acquired through relevant education and experience. The Audit Committee met
four times during the fiscal year ended February 28, 2004.
The Executive Committee exercises all of the powers and authority of the
Board of Directors in the management and affairs of the Company between meetings
of the Board of Directors, to the extent permitted by law. The members of the
Executive Committee are Sy Syms and Marcy Syms. The Executive Committee did not
meet during the fiscal year ended February 28, 2004.
4
The Stock Option Committee, which was formed by the Board of Directors on
April 27, 2004, reviews and recommends to the Board of Directors renumeration
arrangements and compensation plans for the Company's officers and key employees
and administers the Company's Amended and Restated Incentive Stock Option and
Appreciation Plan, as amended (the "Option Plan"), and determines the officers
and key employees who are to be granted options under the Option Plan and the
number of shares subject to such options. The members of the Stock Option
Committee are David A. Messer, Wilbur L. Ross, Jr. and Harvey A. Weinberg, none
of whom is, or has ever been, an officer or employee of the Company and are all
"independent" for the purposes of the NYSE listing standards. The Stock Option
Committee did not meet during the fiscal year ended February 28, 2004.
In addition, the Company's Stock Option - Compensation Committee of the
Board of Directors, which administered the Company's Option Plan and is the
predecessor committee to the Stock Option Committee, was composed of the
following board members until April 27, 2004: David A. Messer, Wilbur L. Ross,
Jr. and Harvey A. Weinberg. The Stock Option - Compensation Committee met once
during the fiscal year ended February 28, 2004.
The Compensation Committee, which was formed by the Board of Directors on
April 27, 2004, is responsible for reviewing and approving, for the CEO and
other executives of the Company, annual base salary, and for determining
director compensation and benefit programs (other than those programs
administered by the Stock Option Committee). The full Board of Directors reviews
and approves the recommendations of the Compensation Committee for the annual
base salary of the CEO and Chairman of the Board. The current members of the
Compensation Committee are Sy Syms and Marcy Syms. The Compensation Committee
did not meet during the fiscal year ended February 28, 2004.
The Nominating & Corporate Governance Committee, which was formed by the
Board of Directors on April 27, 2004, seeks to, among other things, find
qualified individuals to serve as Directors of the Company. The current members
of the Nominating & Corporate Governance Committee are Marcy Syms and Sy Syms.
The Nominating & Corporate Governance Committee did not meet during the fiscal
year ended February 28, 2004.
Minimum Qualifications. The Company does not set specific criteria for
directors except to the extent required to meet applicable legal, regulatory and
stock exchange requirements, including, but not limited to, the independence
requirements of the NYSE and the SEC, as applicable. Nominees for director will
be selected on the basis of outstanding achievement in their personal careers;
board experience; wisdom; integrity; ability to make independent, analytical
inquiries; understanding of the business environment; and willingness to devote
adequate time to Board duties. While the selection of qualified directors is a
complex and subjective process that requires consideration of many intangible
factors, the Nominating & Corporate Governance Committee believes that each
director should have a basic understanding of (i) principal operational and
financial objectives and plans and strategies of the Company, (ii) results of
operations and financial condition of the Company and of any significant
subsidiaries or business segments, and (iii) the relative standing of the
Company and its business segments in relation to it competitors.
Nominating Process. The Nominating & Corporate Governance Committee is
willing to consider candidates submitted by a variety of sources (including
incumbent directors, shareholders, Company management and third party search
firms) when reviewing candidates to fill vacancies and/or expand the Board of
Directors. If a vacancy arises or the Board of Directors decides to expand its
membership, the Nominating & Corporate Governance Committee asks each director
to submit a list of potential candidates for consideration. The Nominating &
Corporate Governance Committee then evaluates each potential candidate's
educational background, employment history, outside commitments and other
relevant factors to determine whether he/she is potentially qualified to serve
on the Board of Directors. At that time, the Nominating & Corporate Governance
Committee also will consider potential nominees submitted by shareholders in
accordance with the procedures adopted by the Board of Directors, the Company's
management and, if the Nominating & Corporate Governance Committee deems it
necessary, retain an independent third party search firm to provide potential
candidates. The Nominating & Corporate Governance Committee seeks to identify
and recruit the best available candidates, and it intends to evaluate qualified
shareholder nominees on the same basis as those submitted by members of the
Board of Directors, Company management, third party search firms or other
sources.
5
After completing this process, the Nominating & Corporate Governance
Committee will determine whether one or more candidates are sufficiently
qualified to warrant further investigation. If the process yields one or more
desirable candidates, the Nominating & Corporate Governance Committee will rank
them by order of preference, depending on their respective qualifications and
the Company's needs. The Nominating & Corporate Governance Committee will then
contact the preferred candidate(s) to evaluate their potential interest and to
set up interviews with the Nominating & Corporate Governance Committee. All such
interviews are held in person, and include only the candidate and the Nominating
& Corporate Governance Committee members. Based upon interview results and
appropriate background checks, the Nominating & Corporate Governance Committee
then decides whether it will recommend the candidate's nomination to the full
Board of Directors.
When nominating a sitting director for re-election at an annual meeting,
the Nominating & Corporate Governance Committee will consider the director's
performance on the Board of Directors and the director's qualifications in
respect of the criteria referred to above.
Consideration of Shareholder Nominated Directors. The Nominating &
Corporate Governance Committee will consider candidates for the Board of
Directors submitted by shareholders in a timely manner in accordance with
applicable securities laws. Any shareholder wishing to submit a candidate for
consideration should send the following information to the Company's Secretary,
Syms Corp, Syms Way, Secaucus, New Jersey 07094: (i) shareholder's name, number
of shares owned, length of period held, and proof of ownership; (ii) name, age
and address of candidate; (iii) a detailed resume describing, among other
things, the candidate's educational background, occupation, employment history
for at least the previous five years, and material outside commitments (e.g.,
memberships on other boards and committees, charitable foundations, etc.); (iv)
a supporting statement which describes the candidate's reasons for seeking
election to the Board of Directors; (v) a description of any arrangements or
understandings between the candidate and the Company; and (vi) a signed
statement from the candidate, confirming his or her willingness to serve on the
Board of Directors.
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE GUIDELINES AND CODE OF BUSINESS CONDUCT AND ETHICS
The Board of Directors has adopted Corporate Governance Guidelines. The
Board of Directors has also adopted a Code of Business Conduct and Ethics. The
Corporate Governance Guidelines and the Code of Business Conduct and Ethics will
be available on the Company's website at www.syms.com. A copy of the Corporate
Governance Guidelines and a copy of the Code of Business Conduct and Ethics are
available in print to any shareholder who requests it, in writing to the
Company's Assistant Secretary, Syms Corp, Syms Way, Secaucus, New Jersey 07094.
CODE OF ETHICS FOR SENIOR FINANCIAL OFFICERS
The Board of Directors has adopted a Code of Ethics applicable to the
Company's Chief Executive Officer, Chief Financial Officer and Controller, which
will be available on the Company's website at www.syms.com. A copy of the Code
of Ethics for Senior Financial Officers is available in print to any shareholder
who requests it, in writing to the Company's Assistant Secretary, Syms Corp,
Syms Way, Secaucus, New Jersey 07094.
NON-MANAGEMENT DIRECTORS
Non-management directors will meet in executive sessions routinely and
regularly and, if the group of non-management directors includes any director
who is not "independent," the independent directors will meet at least once a
year in an executive session of only independent directors. As appropriate, some
of the executive sessions of the non-management directors should be with the CEO
and some should be outside the presence of the CEO and any other management
officials.
6
COMMUNICATIONS BETWEEN SHAREHOLDERS AND THE BOARD OF DIRECTORS
Shareholders and other interested persons seeking to communicate with the
Board of Directors should submit any communications in writing to the Company's
Assistant Secretary, Syms Corp, Syms Way, Secaucus, New Jersey 07094. Any such
communication must state the number of shares beneficially owned by the
shareholder making the communication. The Company's Assistant Secretary will
forward such communication to the full Board of Directors or to any individual
director or directors to whom the communication is directed.
ATTENDANCE AT ANNUAL MEETINGS
All Board of Director's members are expected to attend in person the
Company's annual meeting of shareholders and be available to address questions
or concerns raised by shareholders.
COMPENSATION OF DIRECTORS
Each member of the Board of Directors who is not an officer or employee of
the Company receives a Director's fee presently established at the rate of
$3,500 per meeting for attending regular or special meetings of the Board of
Directors. Additionally, each committee member of the Board of Directors
receives $500 for any committee meeting attended by such member, together with
travel expenses related to such attendance. Directors who are officers or
employees of the Company do not receive any additional compensation by reason of
their service as directors.
EXECUTIVE OFFICERS
The Company's executive officers, as well as additional information with
respect to such persons, are set forth in the table below:
NAME AGE POSITION
---- --- --------
Sy Syms 78 Chairman of the Board and Director
Marcy Syms 53 Chief Executive Officer/President and Director
Antone F. Moreira 67 Vice President, Chief Financial Officer, Treasurer, Assistant
Secretary and Director
Ronald Zindman 54 Executive Vice President, General Merchandise Manager
Allen Brailsford 60 Executive Vice President, Operations
Myra Butensky 45 Vice President, Divisional Merchandise Manager
Men's Tailored Clothing
James Donato 48 Vice President, Operations
Elyse Marks 51 Vice President, Information Services
John Tyzbir 50 Vice President, Human Resources
Information with respect to executive officers of the Company who also are
Directors is set forth on Page 3 of this Proxy Statement.
RONALD ZINDMAN has been Executive Vice President - General Merchandise
Manager of the Company since March 1997. He was Vice President, General
Merchandise Manager, Ladies, Men's and Haberdashery of the Company from July
1994 to March 1997. Previously, Mr. Zindman was Vice President - General
Merchandise Manager Ladies of the Company from March 1993 to July 1994 and a
buyer of men's and women's merchandise from March 1990 to March 1993.
ALLEN BRAILSFORD has been Executive Vice President of the Company since
April 2001. Mr. Brailsford was Vice President of Operations of the Company from
March 1992 to March 2001, and from March 1985 to March 1992, he was Director of
Distribution of the Company.
7
MYRA BUTENSKY has been Vice President - Divisional Merchandise Manager,
Men's Tailored Clothing of the Company since January 1999. From May 1998 to
January 1999, Ms. Butensky was Divisional Merchandise Manager, Ladies, of the
Company. From June 1991 to April 1998, Ms. Butensky was a ladies buyer. Prior to
joining the Company in 1991, Ms. Butensky was a buyer with Popular Trading Club,
Inc, and also spent 10 years with Macy's in a number of buying positions.
JAMES DONATO has been Vice President of Operations of the Company since
April 2001. From November 1997 to March 2001 he was Director of Store Planning
of the Company. Prior to November 1997, Mr. Donato was in store management as a
District Manager and Store Manager of the Company.
ELYSE MARKS has been Vice President of MIS of the Company since April 2001.
From November 1999 to March 2001, Ms. Marks was Director of MIS of the Company.
Prior to November 1999, Ms. Marks was manager of MIS and store systems of the
Company. From 1983 to 1987, she was also in store management for the Company.
JOHN TYZBIR has been Vice President - Human Resources of the Company since
April 1999. From October 1997 to April 1999, Mr. Tyzbir was Director of Human
Resources of the Company. From January 1995 to October 1997, Mr. Tyzbir was
Director of Human Resources of Zallie Supermarkets Corp. From June 1991 to
January 1995, Mr. Tyzbir was Director of Human Resources and Planning of Carson
Pirie Scott Inc.
The Company's officers are elected annually by the Board of Directors and
hold office at the discretion of the Board of Directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of shares of Common
Stock as of June 11, 2004, by each person known by the Company to own
beneficially more than five percent (5%) of the Company's outstanding Common
Stock, by each Director, each nominee for Director, each of the executive
officers named in the Summary Compensation Table, and by all Directors and
executive officers of the Company as a group. Each person named in the table has
sole voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by such person, except as otherwise set forth in the
notes to the table.
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OF COMMON STOCK AS OF JUNE 11, 2004 CLASS
------------------------------------- ----------------------------------- -----
Sy Syms.................................... 6,046,383 (1) 39.2%
Syms Way, Secaucus, NJ 07094
Marcy Syms................................. 2,290,267 (2)(3) 16.0%
Syms Way, Secaucus, NJ 07094
Tweedy, Browne Company, LLC................ 1,286,619 (4) 8.42%
350 Park Avenue
New York, NY 10022
Franklin Advisory Services, LLC............ 1,430,000 (5) 9.3%
777 Mariner's Island Blvd.
San Mateo, CA 94404
Dimensional Fund Advisors, Inc............. 1,289,600 (6) 7.2%
1299 Ocean Avenue
Santa Monica, CA 90401
Ronald Zindman............................ 180,200 (7) 1.0%
Syms Way, Secaucus, NJ 07094
Harvey A. Weinberg......................... 200 *
2384 Augusta Way
Highland Park, IL 60035
8
Allen Brailsford........................... 5,200 *
Syms Way, Secaucus, NJ 07094
David A. Messer............................ 2,000 *
Sempra Energy
58 Commerce Road
Stamford, CT 06902
Antone F. Moreira.......................... 5,000 *
Syms Way, Secaucus, NJ 07094
Wilbur L. Ross, Jr......................... 3,000 *
WL Ross & Company LLC
101 East 52nd Street
New York, NY 10022
Amber M. Brookman ......................... -- N/A
Brookwood Companies, Inc.
232 Madison Avenue, 10th Floor
New York, NY 10016
All directors and executive officers as a 8,547,250 56.6%
group (12 persons).........................
-----------------------------
* Less than one percent.
(1) Includes (a) 6,046,283 shares held in the Sy Syms Revocable Living
Trust, dated March 17, 1989, as amended (the "Sy Syms Revocable Living
Trust"); Sy Syms retains the sole voting power of such shares and the
right to revoke the Sy Syms Revocable Living Trust at any time, and (b)
100 shares held by Sy Syms as custodian for Jillian E. Merns.
(2) Includes 537,500 shares issuable upon the exercise of options granted
under the Option Plan and either currently exercisable or exercisable
within 60 days of June 11, 2004.
(3) Includes (a) 697,592 shares held in the Laura Merns Living Trust, dated
February 14, 2003, between Laura Merns, as settlor, and Marcy Syms, as
trustee, and (b) 317,183 shares held in the Marcy Syms Revocable Living
Trust, dated January 12, 1990, as amended; Marcy Syms retains the sole
voting power of such shares and the right to revoke the Marcy Syms
Revocable Living Trust at any time.
(4) Tweedy, Browne Company LLC ("Tweedy") has sole voting and dispositive
power with respect to 1,286,619 of its shares. This information is
based upon a Schedule 13G publicly filed by Tweedy in January 2004.
(5) Franklin Advisory Services, LLC ("Franklin") has sole voting and
dispositive power with respect to 1,430,000 of its shares. This
information is based upon a Schedule 13G publicly filed by Franklin in
February 2001.
(6) Dimensional Fund Advisors, Inc. ("Dimensional") has sole voting and
dispositive power with respect to 1,289,600 of its shares. This
information is based upon a Schedule 13G publicly filed by Dimensional
in February 2004.
(7) Includes 178,000 shares issuable upon the exercise of options granted
under the Option Plan and either currently exercisable or exercisable
within 60 days of June 11, 2004.
9
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by the Company and its
subsidiaries for the last three fiscal years to its five most highly compensated
executive officers, including the Chief Executive Officer, serving as such at
the end of the most recently completed fiscal year.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
AWARDS (2)
SECURITIES ALL OTHER
UNDERLYING COMPENSA-
ANNUAL COMPENSATION OPTIONS/SARS TION (3)
------------------------- ------------ --------
NAME AND PRINCIPAL POSITION YEAR (1) SALARY BONUS
--------------------------- -------- --------------- -----
Sy Syms............................. 2003 $624,988 (4)(5) $ 0 0 $ 0
Chairman of the Board 2002 $721,138 (4)(5) $ 0 0 $ 0
2001 $824,980 (4)(5) $ 0 0 $ 0
Marcy Syms ......................... 2003 $578,485 (4) $ 0 0 $ 0
Chief Executive Officer/President 2002 $589,544 (4) $ 0 0 $ 0
2001 $573,332 (4) $ 0 0 $ 0
Ronald Zindman...................... 2003 $399,023 $ 0 0 $ 0
Executive Vice President- 2002 $350,000 $ 0 0 $ 0
General Merchandise Manager 2001 $350,000 $ 0 0 $ 0
Antone F.Moreira.................... 2003 $156,000 $ 0 0 $ 0
Vice President, Chief Financial 2002 $150,800 $ 0 0 $ 0
Officer, Treasurer and Assistant
Secretary 2001 $150,800 $ 0 0 $ 0
Allen Brailsford.................... 2003 $137,600 $10,000 0 $ 0
Executive Vice President 2002 $132,600 $ 0 0 $ 0
Operations 2001 $132,600 $ 0 0 $ 0
(1) The compensation reported for fiscal years ended February 28, 2004, March 1,
2003 and March 2, 2002 reflects annual salaries for a 52-week period.
(2) During the period covered by the table, the Company did not make any
restricted stock awards or have in effect (or make payments under) any long
term incentive plan other than the Option Plan, pursuant to which only stock
options, but no stock appreciation rights, were awarded.
(3) Company's contributions to a defined contribution profit sharing retirement
plan.
(4) Sy Syms is paid at a weekly rate of $12,019 and Marcy Syms is paid at a
weekly rate of $11,033.
(5) Excludes payments made under the lease of the Elmsford store. See "Certain
Relationships and Related Transactions."
STOCK OPTION GRANTS IN FISCAL 2003
No stock options or stock appreciation rights were granted to the executive
officers named in the Summary Compensation Table during the fiscal year ended
February 28, 2004.
10
AGGREGATED OPTION/SAR EXERCISES
IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
The following table provides information concerning exercises of stock
options as of February 28, 2004 by the executive officers named in the Summary
Compensation Table and the value of unexercised options held by them at February
28, 2004.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
NUMBER OF OPTIONS/SARS AT OPTIONS/SARS AT
SHARES VALUE FEBRUARY 28, 2004 (1) FEBRUARY 28, 2004 ($)(2)
ACQUIRED ON REALIZED -------------------------- --------------------------
NAME EXERCISE ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- --- ----------- ------------- ----------- -------------
Sy Syms 0 0 0 0 0 0
Marcy Syms 0 0 537,500 0 710,938 0
Ronald Zindman 0 0 178,000 0 205,888 0
Antone F. Moreira 0 0 5,000 0 11,375 0
Allen Brailsford 0 0 5,000 0 11,375 0
-----------------------------
(1) No SARs are held.
(2) Based upon a closing price of $7.90 per share of Common Stock on the NYSE
on February 28, 2004.
PENSION PLAN
The following table sets forth the estimated annual benefits payable on
retirement to persons in specified renumeration and years of participation
classifications under the Company's defined benefit pension plan (the "Pension
Plan") for employees not covered under collective bargaining agreements:
HIGHEST FIVE 15 20 25 30 35
YEAR AVERAGE YEARS OF YEARS OF YEARS OF YEARS OF YEARS OF
COMPENSATION SERVICE SERVICE SERVICE SERVICE SERVICE
------------ ------- ------- ------- ------- -------
$ 50,000 ............................. $ 5,700 $ 7,600 $ 9,500 $9,500 $ 9,500
75,000 ............................. 8,550 11,400 14,250 14,250 14,250
100,000 ............................. 11,400 15,200 19,000 19,000 19,000
125,000 ............................. 14,250 19,000 23,750 23,750 23,750
150,000 ............................. 17,100 22,800 28,500 28,500 28,500
Each participant in the Pension Plan is entitled to an annual retirement
benefit equal to 19% of the average compensation (excluding bonuses) during his
five consecutive highest paid calendar years during the ten years prior to
retirement except that the annual benefit payable to Sy Syms at normal
retirement, as per the Pension Plan, cannot exceed $70,000. A participant's
interest vests over a seven year period commencing in the third year at the rate
of 20% after completing three years of employment and 20% for each year
thereafter, and is 100% vested after the completion of seven years of service.
Benefit payments are made in the form of one of five annuity payment options
elected by the participant. Amounts in the table are based on a straight life
annuity. For the executive officers named in the Summary Compensation Table,
compensation for purposes of the Pension Plan generally corresponds to the
amounts shown in the "Salary" column of the Summary Compensation Table.
Currently no more than $160,000 (as adjusted from time to time by the
Internal Revenue Service) of cash compensation may be taken into account in
calculating benefits payable under the Pension Plan. Executive officers in the
Summary Compensation Table were credited with the following years of service at
December 31, 2003: Sy Syms, 30 or more years; Marcy Syms, 26 or more years;
Ronald Zindman, 14 years; Allen Brailsford, 19 or more years; and Antone Moreira
7 or more years. Benefits under the Pension Plan are not subject to any
deduction for social security or other offset amount. The annual retirement
benefit is reduced pro rata if the employee has completed less than fifteen
years of service. Effective December 31, 1994, the plan was amended to change
the pro rata reduction to be
11
based on 25 years of participation. A participant is entitled to be paid his
benefits upon his retirement at age 65. If a participant has completed at least
15 years of service he may retire upon reaching age 55 but the benefits he
receives will be actuarially reduced to reflect the longer period during which
he will receive a benefit. A participant who leaves the Company for any reason
other than death, disability or retirement will be entitled to receive the
vested portion of his benefit payable over different periods of time depending
on the aggregate amount vested and payment option elected.
EMPLOYMENT AGREEMENTS
The Company has entered into an employment agreement dated November 1, 1996
with its Executive Vice President - General Merchandise Manager, Ronald Zindman.
Pursuant to the agreement, Mr. Zindman is to receive a minimum salary of
$225,000 per year from inception through March 1, 1997; $300,000 per year for
the next succeeding three years; $350,000 per year for the next succeeding three
years; $400,000 per year for the next succeeding three years; and $450,000 per
year for the final three years of the agreement. The agreement is to remain in
effect until March 1, 2009. Termination of the agreement by the Company before
that date will require a payment to Mr. Zindman equal to 150% of one year's
salary (at the employee's then current rate). If this agreement is terminated by
the employee prior to its final term, the Company must pay to the employee a sum
equal to 60% of one year's salary (also at the employee's then current rate).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
All of the members of the Stock Option Committee are non-employee directors
and none has any direct or indirect material interest in or relationship with
the Company outside of his position as a Director. The members of this Committee
are Harvey A. Weinberg, David A. Messer and Wilbur L. Ross, Jr.
In addition, the Stock Option - Compensation Committee, the predecessor
committee to the Stock Option Committee, was composed entirely of non-employee
directors that had no direct or indirect material interest in or relationship
with the Company outside of his position as a Director. The Stock Option -
Compensation Committee was composed of the following board members until April
27, 2004: David A Messer, Wilbur L. Ross, Jr. and Harvey A. Weinberg.
No executive officer of the Company served during fiscal 2003 (i) as a
member of the compensation committee (or other board committee performing
equivalent functions or, in the absence of any such committee, the entire board
of directors) of another entity, one of whose executive officers serves on the
Stock Option - Compensation Committee of the Company; (ii) as a director of
another entity, one of whose executive officers served on the Stock
Option-Compensation Committee of the Company; or (iii) as a member of the
compensation committee (or other board committee performing equivalent functions
or, in the absence of any such committee, the entire board of directors) of
another entity, one of whose executive officers served as a Director of the
Company
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE FUTURE FILINGS,
INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART, THE FOLLOWING PERFORMANCE
GRAPH AND "REPORT OF THE COMPENSATION COMMITTEE" SHALL NOT BE INCORPORATED BY
REFERENCE INTO ANY SUCH FILINGS.
12
PERFORMANCE GRAPH
Below is a graph comparing the cumulative total shareholders return on the
Company's Common Stock for the last six fiscal years (beginning February 26,
1999 and ending February 27, 2004, the last trading date for fiscal 2003) with
the cumulative total return of the Wilshire 5000 Index and the S&P Retail
Composite Index over the same period (assuming (i) the investment of $100 on
February 26, 1999 in the Company's Common Stock and in each of these two
Indexes, (ii) reinvestment of all dividends and (iii) no payment of brokerage or
other commissions or fees).
(THE DATA BELOW REPRESENTS A GRAPH IN THE PRINTED PIECE)
2/26/99 2/25/00 3/2/01 3/1/02 2/28/03 2/27/04
Syms Corp 100 55 72 72 94 100
S&P Retail 100 106 103 119 85 133
Wilshire 5000 100 118 101 92 71 99
REPORT OF THE STOCK OPTION - COMPENSATION COMMITTEE
The Stock Option - Compensation Committee's (the predecessor committee to
both the Stock Option Committee and the Compensation Committee) through its
executive compensation policy, strives to provide compensation rewards based
upon both corporate and individual performance while maintaining a relatively
simple compensation program in order to avoid the administrative costs which the
Stock Option - Compensation Committee believes are inherent in multiple complex
compensation plans and agreements. The Company has only one employment agreement
with an executive officer, Ronald Zindman, and has only one executive
compensation plan, the Option Plan.
The determination of compensation ranges for executive officers reflects a
review of salaries and bonuses for executive officers holding similar positions
in retailers of relatively comparable size and orientation. However, in making
compensation decisions, the Stock Option - Compensation Committee remains
cognizant of the Board of Directors' responsibility to enhance shareholder
value. The Stock Option - Compensation Committee utilizes cash bonuses, when it
feels a bonus is merited, based on factors such as an executive's individual
performance and the Company's performance relative to its past performance and
the performance of competitors. The Company has available a long-term incentive
for executives to both remain in the employ of the Company and to strive to
maximize shareholder value through the Option Plan, which aligns the interests
of executives with those of shareholders.
Determination of Marcy Syms' compensation as the Company's Chief Executive
Officer for the fiscal year ended February 28, 2004 reflects the Company's
performance and a comparison with chief executive officer compensation of the
Company's competitors, but also reflects recognition of Ms. Syms unique, ongoing
contribution to the growth, success and profitability of the Company.
It is the responsibility of the Stock Option - Compensation Committee to
address the issues raised by the tax laws which make certain
non-performance-based compensation to executives of public companies in excess
of $1,000,000 non-deductible to the Company. In this regard, the Stock Option
-Compensation Committee must determine whether any actions with respect to this
limit should be taken by the Company. At this time, it is not anticipated that
any Executive Officer will receive any such compensation in excess of this
limit. Therefore, the Stock Option - Compensation Committee has not taken any
action to comply with the limit.
13
STOCK OPTION - COMPENSATION COMMITTEE
Harvey A. Weinberg
David A. Messer
Wilbur L. Ross, Jr.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company leases its store in Elmsford, New York from Sy Syms, Chairman
of the Board and principal shareholder of the Company at an annual fixed rent of
$796,500. The lease for this store between the Company and Mr. Syms expires
November 30, 2010. During the fiscal year ended February 28, 2004, the Company
paid to Sy Syms approximately $796,500 in fixed rent.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) Beneficial Ownership Reporting Compliance of the Securities
Exchange Act of 1934, as amended, requires the Company's officers and directors,
and persons who own more than 10% of a registered class of the Company's equity
securities, to file initial statements of beneficial ownership (Form 3), and
statements of changes in beneficial ownership (Forms 4 and 5), of Common Stock
of the Company with the Securities and Exchange Commission. Executive officers,
directors and greater than 10% shareholders are required to furnish the Company
with copies of all such forms they file.
To the Company's knowledge, based solely on its review of the copies of
such forms received by it, or written representations from certain reporting
persons that no additional forms were required, all filing requirements
applicable to its executive officers, directors, and greater than 10%
shareholders were met.
AUDIT COMMITTEE REPORT
The Audit Committee reviews the Company's financial reporting process on
behalf of the Board of Directors. Management has the primary responsibility for
the financial statements and reporting process. The Company's independent
auditors are responsible for expressing an opinion on the conformity of the
Company's audited financial statements to generally accepted accounting
principles.
In this context, the Audit Committee has reviewed and discussed with
management and the independent auditors the Company's audited financial
statements. The Audit Committee has discussed with the independent auditors the
matters required to be discussed by Statement on Auditing Standards No. 61
(communication with audit committees). In addition, the Audit Committee has
received from the independent auditors the written disclosures and letter
required by Independence Standards Board Standard No. 1 (independence
discussions with audit committees) and discussed with them their independence
from the Company and its management.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board has approved that
the Company's audited financial statements be included in the Company's Annual
Report on Form 10-K for the fiscal year ended February 28, 2004, for filing with
the Securities and Exchange Commission.
AUDIT COMMITTEE
David A. Messer
Harvey A. Weinberg
Wilbur L. Ross, Jr.
14
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
PROPOSAL 2
The independent accountants for the Company for the fiscal year ended March
1, 2003 and from March 2 through May 28, 2003 were Deloitte & Touche LLP
("Deloitte & Touche"). The Audit Committee of the Company has appointed BDO
Seidman, LLP ("BDO Seidman") as the independent accountants for the Company for
the fiscal year ending February 26, 2005 and recommends that shareholders ratify
such appointment. The affirmative vote of a majority of the votes cast at the
meeting is necessary for ratification of the appointment of BDO Seidman as the
independent accountants for fiscal 2004. If the shareholders do not ratify the
appointment of BDO Seidman as the Company's independent accountants, the Audit
Committee will reconsider this selection.
On May 23, 2003, upon the recommendation of the Company's Audit Committee,
the Company's Board of Directors voted to approve the engagement of BDO Seidman
as the Company's independent auditors. BDO Seidman will replace Deloitte &
Touche as the Company's independent auditors. Effective May 28, 2003, the
Company dismissed Deloitte & Touche as the Company's independent auditors.
Deloitte & Touche and its predecessor firms had audited the financial statements
of the Company for more than the past ten fiscal years and served as the
Company's independent accountants for the fiscal year ended March 1, 2003.
None of Deloitte & Touche's reports on the Company's consolidated financial
statements for the past two years contained an adverse opinion or a disclaimer
of opinion, or was qualified or modified as to uncertainty, audit scope or
accounting principles.
During the Company's two most recent fiscal years and any subsequent
interim period preceding the dismissal of Deloitte & Touche as the independent
accountants, there were no disagreements between the Company and Deloitte &
Touche on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which, if not resolved to Deloitte &
Touche's satisfaction, would have caused Deloitte & Touche to make reference to
the subject matter in connection with its report on the Company's consolidated
financial statements for such period; and there were no reportable events, as
defined in Item 304(a)(1)(v) of Regulation S-K.
The Company provided Deloitte & Touche with a copy of the foregoing
statements and received a letter from Deloitte & Touche stating its agreement
with such statements. The Company filed this letter as an exhibit to its current
report on Form 8-K/A filed with the SEC on June 3, 2003.
During the Company's two most recent fiscal years and any subsequent
interim period prior to engaging BDO Seidman as the independent accountants, the
Company did not consult BDO Seidman with respect to (i) the application of
accounting principles to a specified transaction, either completed or proposed
or the type of audit opinion that might be rendered on the Company's
consolidated financial statements; or (ii) any matter that was either the
subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K
and the related instructions to this item); or (iii) a reportable event (as
defined in Item 304(a)(1)(v) of Regulation S-K).
A representative of BDO Seidman is expected to be present at the meeting
and will have an opportunity to make a statement if he or she desires to do so
and will be available to respond to appropriate questions from shareholders. A
representative from Deloitte & Touche is not expected to be present at this
meeting.
Audit Fees: Audit fees billed to the Company by BDO Seidman for auditing
the Company's annual financial statements for the fiscal year ended February 28,
2004 and reviewing the financial statements included in the Company's quarterly
reports on Form 10-Q amounted to $125,000. Audit fees billed to the Company by
Deloitte & Touche for auditing the Company's annual financial statements for the
fiscal year ended March 1, 2003 and reviewing the financial statements included
in the Company's quarterly reports on Form 10-Q amounted to $150,000.
15
All Other Fees. There were no audit related fees for fiscal 2003 or 2002.
Tax Fees: In fiscal 2003 and 2002, the Company paid Deloitte & Touche tax
fees of $25,135 and $14,000, respectively. Tax fees included professional
services rendered for tax compliance, tax advice and tax planning.
Audit Related Fees: Fees for employee benefit related services billed by
BDO Seidman during the fiscal year ended February 28, 2004 amounted to
approximately $30,000. Fees for employee benefit related services billed by
Deloitte & Touche during the fiscal year ended March 1, 2003 amounted to
approximately $30,000.
PRE-APPROVAL POLICIES AND PROCEDURES. The Audit Committee Charter adopted
by the Board of Directors of the Company requires that, among other things, the
Audit Committee pre-approve the rendering by the Company's independent auditor
of all audit and permissible non-audit services. The Audit Committee has
pre-approved the services provided by BDO Seidman and Deloitte & Touche referred
to above.
The Company and the Audit Committee have considered whether other non-audit
services by BDO Seidman are compatible with maintaining the independence of BDO
Seidman in its audit of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
RATIFICATION OF THE APPOINTMENT OF BDO SEIDMAN. PROXIES SOLICITED HEREBY WILL BE
VOTED FOR THE PROPOSAL UNLESS A VOTE AGAINST THE PROPOSAL OR ABSTENTION IS
SPECIFICALLY INDICATED.
SHAREHOLDER PROPOSAL REGARDING "INDEXED OPTIONS"
PROPOSAL 3
Joseph S. Criscione, 76 Blackburn Road, Basking Ridge, New Jersey 07920,
owner of 4,000 shares, submitted the following proposal:
"Resolved, that the shareholders of Syms Corporation request that the Board
of Directors adopt an executive compensation policy that all future stock option
grants to senior executives shall be performance-based. For the purposes of this
resolution, a stock option is performance-based if the option exercise price is
indexed or linked to an industry peer group stock performance index so that the
options have value only to the extent that the Company's stock price performance
exceeds the peer group performance level.
Statement of Support: As a well informed shareholder of the Company, I
support executive compensation policies and practices that provide challenging
performance objectives and serve to motivate executives to achieve long-term
corporate value maximization goals. In my opinion stock option grants can and do
often provide levels of compensation well beyond those merited. In my opinion,
it has become abundantly clear that stock option grants without specific
performance-based targets often reward executives for stock price increases due
solely to a general stock market rise, rather than to extraordinary company
performance.
Stock options whose exercise price moves with an appropriate peer group
index composed of a company's primary competitors are a type of option that I
believe addresses these concerns. The resolution requests that the Company's
Board ensure that future senior executive stock option plans link the options
exercise price to an industry performance index associated with a peer group of
companies selected by the Board, such as those companies used in the Company's
proxy statement to compare 5 year stock price performance.
Implementing an indexed stock option plan would mean that our Company's
participating executives would receive payouts only if the Company's stock price
performance was better then that of the peer group average. By tying the
exercise price to a market index, indexed options reward participating
executives for outperforming the competition. Indexed options would have value
when our Company's stock price rises in excess of its peer group average or
declines less than its peer group average stock price decline. By downwardly
adjusting the exercise price of the option during a downturn in the industry,
indexed options remove pressure to reprice stock options. In short, superior
performance would be rewarded.
16
At present, stock options granted by the Company are not indexed to peer
group performance standards. As an owner, I feel strongly that our Company would
benefit from the implementation of a stock option program that rewarded superior
long-term corporate performance. I urge your support for this important
governance reform."
THE BOARD OF DIRECTORS RECOMMENDS
THAT THE SHAREHOLDERS VOTE AGAINST PROPOSAL 3 REGARDING INDEXED OPTIONS
The Board of Directors has considered this proposal and considers it
unnecessary and not in the best interests of the Company and its shareholders.
The Company's executive compensation policy with respect to stock option
grants is administered by the Stock Option Committee of the Board of Directors.
The Stock Option Committee strives to provide compensation rewards based upon
both corporate and individual performance. In making compensation decisions, the
Stock Option Committee remains cognizant of the Board of Directors'
responsibility to enhance shareholder value.
The Company's current long-term incentive programs for executives gives the
Stock Option Committee the flexibility to align the interest of executives with
those of shareholders by enabling the Company to attract and retain key
employees and to secure for the Company the benefits of the incentive inherent
in ownership of the Company's equity securities by employees who are responsible
for the continuing growth and success of the Company. An indexed option plan
would restrict the flexibility the Stock Option Committee currently has and
would not necessarily allow the Company to provide a direct link between
executive performance and long-term value for shareholders.
In addition, an indexed option plan would raise complex financial and
accounting issues. Under such a plan, strike prices would vary widely over time
in accordance with the relative performances of the Company and its peer group,
requiring elaborate and burdensome calculations each quarterly financial
reporting period.
Use of indexed options results in variable accounting treatment under
generally accepted accounting principles ("GAAP"), requiring a quarterly charge
to earnings. In contrast, GAAP does not require expense treatment for fixed term
stock options, e.g., options with no performance conditions attached. Thus,
regardless of the merits of indexed options from a compensation standpoint,
current accounting rules effectively make it financially imprudent to award
them. The charges resulting from the use of indexed options could depress and
add artificial volatility to the Company's earnings, clearly an outcome contrary
to the best interests of shareholders.
Few companies presently grant indexed stock options. Forcing the Company to
grant indexed options could place it at a substantial disadvantage in recruiting
and retaining executives in competition with other companies not burdened with
similar requirements.
For the reasons stated above, the Board of Directors recommends a vote
against the proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST PROPOSAL 3
REGARDING INDEXED OPTIONS. PROXIES SOLICITED HEREBY WILL BE VOTED AGAINST THE
PROPOSAL UNLESS A VOTE FOR THE PROPOSAL OR ABSTENTION IS SPECIFICALLY INDICATED.
OTHER MATTERS
The Board of Directors does not know of any matters to be brought before
the Annual Meeting, except those set forth in the notice thereof. If other
business is properly presented for consideration at the Annual Meeting, the
persons named in the accompanying form of proxy intend to vote the proxies
therein in accordance with their best judgment on such matters.
17
NOTICE OF SHAREHOLDER PROPOSALS
Proposals of shareholders to be considered by the Company for inclusion in
the proxy material for the annual meeting in 2005, must be received by the
Company not later than February 1, 2005 and must comply with the proxy
solicitation rules of the Securities and Exchange Commission. In accordance with
Rule 14a - 4(c) (1) of the Securities Exchange Act of 1934, as amended,
management proxy holders intend to use their discretionary voting authority with
respect to any shareholder proposal raised at the annual meeting in 2005 as to
which the proponent fails to notify the Company on or before May 1, 2005 (45
days prior to the date on which this Proxy Statement was first mailed to
shareholders).
ANNUAL REPORT TO SHAREHOLDERS
The Company's Annual Report for the fiscal year ended February 28, 2004,
including financial statements, is being mailed to shareholders of the Company
with this Proxy Statement. The Annual Report does not constitute a part of the
Proxy Solicitation materials. Shareholders may without charge, obtain copies,
excluding certain exhibits, of the Company's Annual Report on Form 10-K filed
with the Securities and Exchange Commission. Requests for this Report should be
addressed to Investor Relations, Syms Corp, Syms Way, Secaucus, New Jersey
07094.
Your cooperation in giving this matter your immediate attention and
returning your proxies will be appreciated.
By Order of the Board of Directors
Antone F. Moreira
Assistant Secretary
June 11, 2004
18
APPENDIX A
SYMS CORP
AUDIT COMMITTEE CHARTER
I. PURPOSE
The Audit Committee (the "Committee") is appointed by the Board of Directors
(the "Board") of Syms Corp (the "Company") to assist the Board in its oversight
responsibilities relating to (1) the integrity of the financial statements of
the Company and its financial reporting process, (2) internal and external
auditing and the independent auditor's qualifications and independence, (3) the
performance of the Company's internal audit function and independent auditor,
(4) the integrity of the Company's systems of internal accounting and financial
controls, and (5) the compliance by the Company with legal and regulatory
requirements.
II. COMMITTEE MEMBERSHIP
The Committee shall consist of no fewer than three members. The members of the
Committee shall meet the independence and experience requirements of the New
York Stock Exchange and applicable law, including the Sarbanes-Oxley Act of 2002
(the "Act"). All members of the Committee must be able to read and understand
fundamental financial statements at the time of their appointment and at least
one member of the Committee shall be an "audit committee financial expert," as
defined under the Act and the regulations promulgated thereunder, unless the
Board shall have determined that the members of the Committee have sufficient
expertise in financial statement oversight that such expert is not necessary,
which determination shall be disclosed in the Company's applicable Form 10-K.
The members of the Committee shall be appointed by the Board. Committee members
may be replaced by the Board. Members of the Committee may not serve on more
than three public company audit committees (including a member's service on the
Committee), unless the Board determines that such service does not impair such
member's ability to serve on the Committee, which determination shall be
disclosed in the Company's applicable proxy statement.
III. COMMITTEE AUTHORITY AND RESPONSIBILITY
o The Committee shall be solely responsible for the appointment and
retention (or termination) of the independent auditor, and shall be
solely responsible for the compensation and oversight of the work of
the independent auditor. The independent auditor shall report
directly to the Committee.
o The Committee shall have the authority to engage independent
counsel, accounting or other advisors to advise the Committee as it
determines appropriate to assist in the full performance of its
functions.
o The Committee shall approve in advance all audit services and all
non-audit services provided by the independent auditors based on
policies and procedures developed by the Committee. The Company
shall provide the Committee with appropriate funding, as determined
by the Committee, to (i) compensate the registered public accounting
firm engaged for the purpose of rendering an audit report or related
work or performing other audit review or attest services, (ii)
compensate any advisers employed by the Committee and (iii)
reimburse the Committee for its administrative expenses.
o The Committee shall meet as often as it determines, but not less
frequently than quarterly.
o The Committee may form and delegate authority to subcommittees when
appropriate.
o The Committee may request any officer or employee of the Company or
the Company's outside counsel or independent auditor to attend a
meeting of the Committee or to meet with any members of, or
consultants to, the Committee.
o The Committee shall meet with management, the internal auditors and
the independent auditor in separate executive sessions at least
quarterly.
o The Committee may meet with the Company's investment bankers or
financial analysts who follow the Company.
o The Committee shall make regular reports to the Board and shall
submit the minutes of its meetings to the Board.
o The Committee shall review and reassess the adequacy of this Charter
at least annually and recommend any proposed changes to the Board
for approval.
o The Committee shall provide a copy of the Charter to be included as
an appendix to the Company's proxy statement.
o The Committee shall prepare the report required by the rules of the
Securities and Exchange Commission to be included in the Company's
annual proxy statement.
o The Committee shall annually review and evaluate the Committee's own
performance.
The Committee's policies and procedures shall remain flexible in order to best
react to changing conditions and to help ensure that the Company's accounting
and reporting practices are in accord with all requirements and are of the
highest quality. In carrying out its responsibilities, the Committee, to the
extent it deems necessary or appropriate, shall:
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FINANCIAL STATEMENT AND DISCLOSURE MATTERS
1. Review and discuss with management and the independent auditor,
prior to filing, the annual audited financial statements, including
disclosures made in the Company's annual report on Form 10-K and
management's discussion and analysis.
2. Recommend to the Board of Directors, based upon a review of the
Company's audited financial statements and discussions with
management and the independent auditor, and a written statement
provided by management, whether the audited financial statements
should be included in the Company's annual report on Form 10-K.
3. Review and discuss with management and the independent auditor the
Company's quarterly financial statements prior to the filing of its
Form 10-Q, including the results of the independent auditor's
reviews of the quarterly financial statements.
4. Obtain from the independent auditor a report of all critical
accounting policies and practices, all alternative treatments of
financial information that have been discussed and the ramifications
of such alternate treatments, including the treatment preferred by
the independent auditor, and all material communications between the
independent auditor and management.
5. Review analyses prepared by management setting forth the significant
financial reporting issues or judgments made in connection with the
financial statements.
6. Approve, if appropriate, major changes to the Company's auditing and
accounting principles and practices as suggested by the independent
auditor, management, or the internal auditors.
7. Discuss with management, prior to release, the Company's earnings
press releases, including the use of "pro forma" or "adjusted"
non-GAAP information, as well as financial information and earnings
guidance provided to analysts and rating agencies.
8. Discuss with management and the independent auditor the effect of
regulatory and accounting developments as well as off-balance sheet
structures on the Company's financial statements.
9. Inquire of management, the internal auditor, and the independent
auditor about any potential financial risks or exposures and assess
the steps management should take or has taken to identify and
minimize such risk.
10. Discuss with the independent auditor the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the
conduct of the audit, including the management letter provided by
the independent auditor and the Company's response to that letter,
and any difficulties encountered in the course
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of the audit work, including any restrictions on the scope of
activities or access to requested information, and any significant
disagreements with management.
11. Discuss with management, the internal auditor and the independent
auditor the adequacy and effectiveness of the Company's internal
controls.
12. Review with the Chief Executive Officer and the Chief Financial
Officer the Company's disclosure controls and procedures and review
periodically, but in no event less frequently than quarterly,
management's conclusions about the efficacy of such disclosure
controls and procedures.
OVERSIGHT OF THE COMPANY'S RELATIONSHIP WITH THE INDEPENDENT AUDITOR
13. Review the experience and qualifications of the senior members of
the independent auditor team.
14. Obtain and review a report from the independent auditor at least
annually regarding (a) the auditor's 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, (c) any steps taken to
deal with any issues raised in clause (b) above, and (d) all
relationships between the independent auditor and the Company.
Evaluate the qualifications, performance and independence of the
independent auditor, including considering whether the auditor's
quality controls are adequate and the provision of non-audit
services is compatible with maintaining the auditor's independence,
taking into account the opinions of management and the internal
auditor. The Committee shall present its conclusions to the Board
and, if so determined by the Committee, recommend that the Board
take additional action to satisfy itself of the qualifications,
performance and independence of the auditor.
15. Adopt a policy of rotating the lead and concurring audit partner
every five years and consider whether in order to assure continuing
auditor independence, it is appropriate to adopt a policy of
rotating the independent auditing firm itself on a regular basis.
16. Recommend to the Board guidelines that would prohibit the Company
from hiring any employee or former employee of the independent
auditor in a "financial reporting oversight role" if the employee or
former employee provided more than ten hours of audit, review or
attest services to the Company within the one year preceding the
commencement of the Company's then current year's audit.
17. Discuss with the national office of the independent auditor issues
on which they were consulted by the Company's audit team and matters
of audit quality and consistency.
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18. Meet with the independent auditor and the financial management to
review the scope of the audit proposed for the current year and the
audit procedures to be utilized, and at its conclusion, review the
audit, including the comments or recommendations of the independent
auditor.
OVERSIGHT OF THE COMPANY'S INTERNAL AUDIT FUNCTION
19. Review the appointment and, if necessary, the replacement of the
senior internal auditing executive.
20. Review the significant reports to management prepared by the
internal auditing department and management's responses.
21. Discuss with the independent auditor the internal audit department
responsibilities, budget and staffing and any recommended changes in
the planned scope of the internal audit.
22. Review the internal audit function, including the independence and
authority of its reporting obligations, the audit plans proposed for
the coming year, and the coordination of such plans with the work of
the independent auditor.
COMPLIANCE OVERSIGHT RESPONSIBILITIES
23. Obtain from the independent auditor assurance that it is not aware
of any circumstances that would require reporting under Section 10A
of the Securities Exchange Act of 1934.
24. Obtain reports from management and the Company's senior internal
auditing executive that the Company is in conformity with applicable
legal requirements and the Company's Code of Business Conduct and
Ethics and advise the Board with respect to such compliance.
25. Review with management and the independent auditor and approve all
transactions or courses of dealing with parties related to the
Company.
26. Review with management and the independent auditor any
correspondence with regulators or governmental agencies and any
published reports which raise material issues regarding the
Company's financial statements or accounting policies.
27. Establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal
accounting controls or auditing matters. Additionally, the Committee
shall ensure that all such complaints are treated confidentially and
anonymously, as set forth in Section 301 of the Act.
-5-
28. Discuss with the Company's counsel legal and regulatory matters that
may have a material impact on the Company's financial statements,
and compliance policies and programs, including corporate securities
trading policies.
29. Perform any other activities consistent with this Charter as the
Committee or the Board may deem necessary or appropriate.
IV. LIMITATION OF COMMITTEE'S ROLE
While the Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Committee to plan or conduct audits or to
determine that the Company's financial statements and disclosures are complete
and accurate and are in accordance with generally accepted accounting principles
and applicable rules and regulations. These are the responsibilities of the
Company's management and the independent auditor.
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ANNUAL MEETING OF SHAREHOLDERS OF
SYMS CORP
JULY 15, 2004
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
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PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [x]
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1. The election of the following persons as Directors of the Company to serve
for the respective terms set forth in the accompanying Proxy Statement:
[_] FOR ALL NOMINEES 0 NOMINEES:
0 Sy Syms
[_] WITHHOLD AUTHORITY 0 Marcy Syms
FOR ALL NOMINEES 0 Antone F. Moreira
0 Harvey A. Weinberg
[_] FOR ALL EXCEPT 0 Amber M. Brookman
(See instructions below) 0 Wilbur L. Ross, Jr.
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:
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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.
2. To ratify the appointment of BDO Seidman, LLP as FOR AGAINST ABSTAIN
independent accountants of the Company for the
fiscal year ending February 26, 2005. [_] [_] [_]
3. To vote on a Shareholder Proposal requesting
indexed options, if properly presented at the [_] [_] [_]
meeting.
4. In their discretion with respect to any other matter that may properly come
before the meeting or any and all adjournment(s) or postponement(s)
thereof.
Signature of Shareholder Date:
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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.
SYMS CORP
ANNUAL MEETING OF SHAREHOLDERS - JULY 15, 2004
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Syms Corp, a New Jersey corporation (the
"Company"), hereby appoints Sy Syms and Marcy Syms, and each of them with full
power to act without the other, as proxy for the undersigned, with full power of
substitution, to vote and otherwise represent all shares of common stock of the
Company held by the undersigned at the Annual Meeting of Shareholders of the
Company (receipt of a copy of the Notice of such meeting, and Proxy Statement
being acknowledged) on July 15, 2004 at 10:30 a.m., at the offices of Syms Corp,
Syms Way, Secaucus, New Jersey 07094, upon the following matters and upon such
other business as may properly come before the meeting and any and all
adjournment(s) or postponement(s) thereof, with the same effect as if the
undersigned were present and voting such shares. The undersigned hereby revokes
any proxy previously given with respect to such shares.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS MADE. IF THIS PROXY IS EXECUTED BUT NO SPECIFICATION IS MADE, THE
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED "FOR" EACH OF THE BOARD OF
DIRECTORS' NOMINEES AND "FOR" PROPOSAL 2 AND "AGAINST" PROPOSAL 3. THE PROXIES,
IN THEIR DISCRETION, ARE AUTHORIZED TO VOTE UPON ANY OTHER MATTERS THAT MAY
PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT(S) OR POSTPONEMENT(S)
THEREOF.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
14475