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The CATO Corporation
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders to be held at the Home Office of the Company, 8100
Denmark Road, Charlotte, NC 28273 on Thursday, May 25, 1995 at
11:00 A.M., Eastern Time.
The meeting this year will be streamlined in the interest of
saving time and money. We will briefly review our results and
plans for coping with this difficult retail apparel environment.
The Notice of the Annual Meeting of Stockholders and Proxy
Statement are attached. The matters to be acted upon by our
stockholders are set forth in the Notice of Annual Meeting of
Stockholders and discussed in the Proxy Statement.
We would appreciate your signing, dating and returning to
the Company the enclosed proxy card in the envelope provided at
your earliest convenience.
We look forward to seeing you at our Annual Meeting.
Sincerely yours,
WAYLAND H. CATO, JR.
Chairman of the Board Chief
Executive Officer
8100 Denmark Road
P. O. Box 34216
Charlotte, NC 28234
(704) 554-8510
The Cato Corporation
________________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 25, 1995
________________________________________________
TO THE STOCKHOLDERS OF
THE CATO CORPORATION
Notice is hereby given that the annual meeting of
stockholders of The Cato Corporation (the Company) will be held
on Thursday, May 25, 1995 at 11:00 A.M., Eastern Time, at the
Home Office of the Company, 8100 Denmark Road, Charlotte, NC
28273, for the following purposes:
1. To consider and vote upon a proposal to amend the
Company's 1987 Non-Qualified Stock Option Plan to
increase by 750,000 the number of shares of Common
Stock available for issuance under the Plan;
2. To elect five Directors to serve until their
successors are elected and qualified;
3. To transact such other business as may properly come
before the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on
March 31, 1995, as the record date for determination of
stockholders entitled to notice of and to vote at the meeting or
any adjournments thereof.
By Order of the Board of Directors
ALAN E. WILEY
Dated: May 2, 1995 Secretary
_______________________________________________________________
STOCKHOLDERS ARE URGED TO SIGN AND MAIL THE ENCLOSED PROXY IN THE
ENCLOSED ENVELOPE TO ENSURE A QUORUM AT THE MEETING. THIS IS
IMPORTANT WHETHER YOU OWN FEW OR MANY SHARES. DELAY IN
RETURNING YOUR PROXY MAY SUBJECT THE COMPANY TO ADDITIONAL
EXPENSE.
The Cato Corporation
8100 Denmark Road
Charlotte, North Carolina 28273-5975
____________________
PROXY STATEMENT
____________________
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors of The Cato
Corporation (the Company) for use at the annual meeting of
stockholders of the Company to be held on May 25, 1995, and at
any adjournment or adjournments thereof. This proxy statement
and the accompanying proxy card are first being mailed to
stockholders on or about May 2, 1995.
Only stockholders of record at the close of business on
March 31, 1995 are entitled to notice of and to vote at the
meeting. As of March 31, 1995, the Company had outstanding and
entitled to vote 23,132,327 shares of Class A Common Stock
(Class A Stock) held by approximately 1,286 holders of record
and 5,264,317 shares of Class B Common Stock (Class B Stock)
held by 16 holders of record. The Transfer Agent estimates that
there are approximately 8,000 shareholders in total. Holders of
Class A stock are entitled to one vote per share and holders of
Class B Stock are entitled to ten votes per share. Holders of
Class A Stock vote with holders of Class B Stock as a single
class.
All proxies which are properly executed and received prior
to the meeting will be voted at the meeting. If a stockholder
specifies how the proxy is to be voted on any of the business to
come before the meeting, the proxy will be voted in accordance
with such specification. If no specification is made, the proxy
will be voted for the amendments to the Company's 1987 Non
Qualified Stock Option Plan and for the election of Directors. A
proxy may be revoked, to the extent it has not been exercised, at
any time prior to its exercise by written notice to the Secretary
of the Company, by executing and delivering a proxy with a later
date or by voting in person at the meeting.
If you plan to attend and vote at the meeting and your
shares are held in the name of a broker or other nominee, please
bring with you a proxy or letter from the broker or nominee to
confirm your ownership of shares.
In accordance with applicable Delaware law and the Company's
Bylaws, the holders of a majority of the combined voting power of
Class A Stock and Class B Stock present in person or represented
by proxy at the meeting will constitute a quorum. Abstentions
are counted for purposes of determining the presence or absence
of a quorum. With regard to the election of directors, votes may
either be cast in favor of or withheld, and (assuming the
presence of a quorum) directors will be elected by a plurality of
the votes cast. Votes that are withheld will be excluded
entirely from the vote and will have no effect on the outcome of
the election. Approval of the proposal to amend the Company's
1987 Non-Qualified Stock Option Plan requires the affirmative
vote of a majority of the combined voting power of the Class A
Stock and Class B Stock present in person or represented at the
meeting and entitled to vote. On any proposal other than the
election of directors, an abstention will have the same effect as
a negative vote but, because shares held by brokers will not be
considered entitled to vote on matters which the brokers withhold
authority, a broker non-vote will have no effect on the vote on
any such proposal.
The Company will bear the expense of preparing, printing and
mailing the proxy statement to stockholders. The Company will
reimburse brokers, dealers, banks and other custodians, nominees
and fiduciaries for their reasonable expenses in forwarding proxy
solicitation materials to beneficial owners of the Company's
Class A Stock and Class B Stock and securing their voting
instructions.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth, as of March 31, 1995,
certain information regarding the ownership of the outstanding
shares of Class A Stock and Class B Stock by (i) each director
and nominee, (ii) each person who is known by the Company to own
more than 5% of such stock, (iii) executive officers listed in
the Summary Compensation Table, and (iv) all directors and
executive officers as a group. Unless otherwise indicated in the
footnotes below, each stockholder named has sole voting and
investment power with respect to such stockholder's shares.
Percent
Shares Beneficially Owned(1)(2) of Total
Class A Stock Class B Stock Voting
Name Number Percent Number Percent Power
Wayland H.Cato,Jr.(3)(4) 3,495,106 15.0% 3,732,284 61.2% 48.4%
Edgar T. Cato(5) 1,734,653 7.5 1,785,534 33.4 25.5
Linda McFarland Jenkins(6) 186,090 * - - *
John P. Derham Cato(7) 214,837 * 85,965 1.6 1.4
Clarice Cato Goodyear(8) 266,465 1.1 190,515 3.6 2.9
Thomas E.Cato(9) 142,869 * 95,925 1.8 1.5
Alan E. Wiley(10) 17,300 * - - *
David Kempert(11) 53,603 * - - *
Howard A. Severson(12) 23,698 * - - *
George S. Currin 11,287 * - - *
James H. Shaw 10,500 * - - *
Robert L. Kirby 450 * - - *
Robert W. Bradshaw,Jr. 500 * - - *
Grant L. Hamrick 3,000 * - - *
Paul Fulton 1,000 * - - *
A.F.(Pete)Sloan 1,200 * - - *
All directors and executive officers
as a group(17 persons)(13) 6,182,752 25.8 5,890,973 95.2 75.8
Jurika and Voyles,Inc.(14) 1,702,519 7.4 - - 2.2
NBD Bancorp,Inc.(15) 1,393,950 6.0 - - 1.8
* Less than 1%
(1) Includes the vested interest of executive officers in the
Company's Employee Stock Ownership Plan. The aggregate
vested amount credited to their accounts as of March 31, 1995
was 210,893 shares of Class A Stock.
(2) Share amounts shown as subject to stock options in the
footnotes below cover shares under options that are
presently exercisable or will become exercisable within 60 days
after March 1,1995.
(3) The business address of this stockholder is 8100 Denmark
Road, Charlotte, North Carolina 28273-5975.
(4) The amounts shown for Class A Stock and Class B Stock
include 693,000 shares and 346,500 shares, respectively,
held in an irrevocable trust for Mr. Cato's children. The
amounts shown for Class A Stock also include 41,250 shares
held in a separate trusts for Mr.
Cato's children and grandchildren. An officer of the Company
serves as trustee for these trusts and has sole voting and
investment power with respect to these shares. Mr. Cato
disclaims beneficial ownership of
the shares held in these trusts. The amounts shown for Class A
Stock and Class B Stock also include 216,666 and 833,334
shares respectively, subject to stock options.
(5) The amounts shown for Class A Stock and Class B Stock
include 141,666 and 83,334 shares, respectively,
subject to stock options. The address
of this stockholder is Harbour Hill Club, Number 415, 2539 South
Bayshore Drive, Coconut Grove, Florida 33133.
(6) Includes 180,000 Shares of Class A Stock subject to stock
options.
(7) Includes 3,000 shares of Class A Stock owned by Mr. John
Cato's wife. Also includes 4,500 shares of Class A Stock
and 3,750 shares of Class B Stock
subject to stock options held by Mr. John Cato's wife. Mr. John
Cato disclaims beneficial ownership of shares held directly or
indirectly by his wife. The amount shown for Class A Stock
includes 72,000 shares subject to stock options.
(8) The amounts shown for Class A Stock and Class B Stock
include 32,520 shares of Class A Stock and 22,500 shares
of Class B Stock held by Ms. Goodyear's
husband. Ms. Goodyear disclaims beneficial ownership of these
shares. The amount shown for Class A Stock includes 67,500
shares subject to stock options.
(9) The amounts shown for Class A Stock include 4,770 shares of
stock held by Mr. Thomas Cato's children for which he
acts as custodian. The amounts
shown for Class A Stock include 45,000 shares subject to stock
options.
(10) Includes 17,000 shares of Class A Stock subject to stock
options.
(11) Includes 48,000 shares of Class A Stock subject to stock
options.
(12) Includes 14,750 shares of Class A Stock subject to stock
options.
(13) The amounts shown for Class A Stock and Class B Stock
include 826,582 and 921,168 shares, respectively, subject
to stock options.
(14) Based on Schedule 13G received by the Company from this
stockholder on or about February 27, 1995. Jurika &
Voyles, Inc. is located at 1999 Harrison
Street, Suite 700, Oakland, California 94612.
(15) Based on Schedule 13G received by the Company from this
stockholder on or about March 29, 1995. NBD Bancorp, Inc.
is located at 611 Woodward Avenue, Detroit, Michigan 48226.
ELECTION OF DIRECTORS
The Board of Directors, consisting of 15 members, is divided
into three classes with terms expiring alternately over a three
year period. As a result of the expiration of the terms of five
incumbent directors, a total of five nominees are standing for
election at the annual meeting. The five directors whose terms
expire at this year's annual meeting, Ms. McFarland Jenkins,
Messrs. Thomas E. Cato, Currin, Kirby and Sloan, have been
nominated by the Board of Directors to succeed themselves and to
serve until the 1998 annual meeting and until their successors
are elected and qualified.
It is the intention of the persons named in the proxy to
vote for such persons for election to the Board of Directors for
the ensuing periods as described except to the extent authority
to so vote is withheld with respect to one or more nominees.
Should any nominee be unable to serve (which is not anticipated),
the proxy will be voted for the election of a substitute nominee
selected by the Board of Directors. The five nominees shall be
elected by a plurality of the votes of Class A Stock and Class B
Stock voting as a single class. The other ten members of the
Board of Directors will continue to serve in such capacity until
their terms expire and their successors are elected and
qualified.
Nominees
Information with respect to each nominee, including
biographical data for the last five years, is set forth below.
Linda McFarland Jenkins, 47, has been employed as an officer
of the Company since 1990 and a director of the Company since
1991. She currently serves as President and Chief Operating
Officer. Prior to joining the Company, she was Senior Vice
President - General Merchandise Manager of J. B. Ivey & Company,
a Charlotte, North Carolina based regional department store
chain, where she was employed for 11 years.
Thomas E. Cato, 40, has been employed by the Company since
1977, has served as an officer since 1986 and has been a director
of the Company since 1993. He currently serves as Vice
President, Divisional Merchandise Manager, Accessories and Shoes.
Mr. Thomas Cato is a son of Mr. Wayland H. Cato, Jr.
George S. Currin, 58, has been a director of the Company
since 1973. He currently serves as Chairman and Managing
Director of Fourth Stockton Company and Chairman of Currin-
Patterson Properties LLC, both privately held real estate
investment companies.
Robert L. Kirby, 64, has been a director of the Company
since 1992. Mr. Kirby served as Executive Vice President of
NationsBank of North Carolina from 1983 to 1988 and as President
and Director of NationsBank of Florida from 1988 until his
retirement in 1990.
A. F. (Pete) Sloan, 66, has been a director of the Company
since 1994. Mr. Sloan was Chairman of the Board of Lance, Inc.
where he was employed from 1955 until his retirement in 1990.
Mr. Sloan is currently a director of Lance, Inc., Bassett
Furniture Industries, Inc., PCA International, Inc., and
Richfood, Inc.
Continuing Directors
Information with respect to the ten continuing members of
the Board of Directors, including biographical data for the last
five years, is set forth below.
Wayland H. Cato, Jr., 72, is Chairman of the Board and has
been a director of the Company since 1946. Since 1960, he has
served as the Company's Chief Executive Officer.
Edgar T. Cato, 70, is the Vice Chairman of the Board of
Directors and has been a director of the Company since 1946. Mr.
Edgar T. Cato is the brother of Mr. Wayland H. Cato, Jr.
John P. Derham Cato, 44, has been employed as an officer of
the Company since 1981 and has been a director of the Company
since 1986. He currently serves as Executive Vice President,
President and General Manager - It's Fashion! Division. Mr. John
Cato is a son of Mr. Wayland H. Cato, Jr.
Alan E. Wiley, 48, has been employed as an officer of the
Company since 1992 and a director of the Company since 1994. He
currently serves as Executive Vice President, Secretary, Chief
Financial and Administrative Officer. From 1981 through 1990 he
held senior administrative and financial positions with British
American Tobacco, U.S. in various companies of their specialty
retail division. From 1990 until joining the Company, he was
President and majority stockholder of Gibbs-Louis, Inc., an
Orlando, Florida based women's specialty store chain. In May
1992, Gibbs-Louis, Inc. filed a petition pursuant to the U.S.
Bankruptcy Code and was liquidated in June 1992.
Clarice Cato Goodyear, 48, has been employed by the Company
since 1975 and has served as a director and officer of the
Company since 1979. She currently serves as Executive Vice
President & Assistant Secretary. Ms. Goodyear is a daughter of
Mr. Wayland H. Cato, Jr.
Howard A. Severson, 47, has been employed by the Company
since 1985 and has served as a director of the Company since
March 1995. He currently serves as Executive Vice President,
Assistant Secretary and Chief Real Estate and Store Development
Officer. From August 1989 through January 1993, Mr. Severson
served as Senior Vice President - Chief Real Estate Officer.
Robert W. Bradshaw, Jr., 61, has been a director of the
Company since 1994. Since 1961, he has been engaged in the
private practice of law with Robinson, Bradshaw & Hinson, P.A.
and is a shareholder, officer and director of the firm.
Paul Fulton, 61, has been a director of the Company since
1994. From July 1988 to December 1993, Mr. Fulton served as
President of Sara Lee Corporation. Since January 1994, Mr.
Fulton has served as Dean of the Kenan-Flagler Business School of
the University of North Carolina at Chapel Hill. Mr. Fulton is
currently a director of Sonoco Products, NationsBank Corporation,
Bassett Furniture Industries, Inc., and Winston Hotels, Inc.
Grant L. Hamrick, 56, has been a director of the Company
since 1994. From 1961 to 1985, Mr. Hamrick was employed by the
public accounting firm Price Waterhouse and served as Managing
Partner of the Charlotte, North Carolina Office. Since 1989, Mr.
Hamrick has served as Senior Vice President and Chief Financial
Officer for American City Business Journals, Inc.
James H. Shaw, 66, has been a director of the Company since
1989. Mr. Shaw was Chairman of Consolidated Ivey's, a regional
department store chain, from 1988 until his retirement in 1989,
Chairman and Chief Executive Officer of J. B. Ivey & Company from
1986 to 1988 and Chairman and Chief Executive Officer of Ivey's
Carolinas from 1983 to 1986.
The ten continuing members of the Board of Directors are
divided into two classes with current terms expiring in 1996 and
1997, respectively. On the expiration of each director's term,
his successor in office will be elected for a three year term.
The terms of Messrs. Wayland H. Cato, Jr., Edgar T. Cato,
Severson, Bradshaw and Hamrick expire in 1996. The terms of Ms.
Clarice Cato Goodyear and Messrs. John P. Derham Cato, Wiley,
Fulton and Shaw expire in 1997.
Directors' Compensation
Directors who are not employees of the Company receive a fee
for their services of $18,000 per year payable at the rate of
$1,500 per month and are reimbursed for reasonable expenses
incurred in attending director meetings. Non-employee directors
also receive $125 per hour or a maximum of $1,000 per day for
attending special meetings or for additional services.
MEETINGS AND COMMITTEES
During the fiscal year ended January 28, 1995, there were 11
meetings of the Company's Board of Directors.
The Company's Audit Committee reviews the Company's internal
controls and confers with the Company's independent auditors
concerning the scope and results of their audits and any
recommendations they may have, and considers such other matters
relating to auditing and accounting as the Committee may deem
appropriate. During the fiscal year ended January 28, 1995, the
Audit Committee held two meetings. Ms. Clarice Cato Goodyear and
Messrs. Wayland H. Cato, Jr., Hamrick, Bradshaw, Currin, Fulton,
Kirby, Shaw and Sloan are members of the Audit Committee.
The Company's Compensation Committee reviews and approves
the compensation of the executive officers of the Company. The
Compensation Committee held six meetings during the fiscal year
ended January 28, 1995. Ms. Clarice Cato Goodyear and Messrs.
Wayland H. Cato, Jr., Bradshaw, Currin, Fulton, Hamrick, Kirby,
Shaw and Sloan are members of the Compensation Committee.
Mr. Edgar T. Cato attended fewer than 75% of the meetings of
the Board of Directors for the fiscal year ended January 28,
1995.
SUMMARY COMPENSATION TABLE
The table below sets forth the compensation of each named
executive officer of the Company for each of the fiscal years
ended January 28, 1995, January 29, 1994 and January 30, 1993.
Long Term
Compensation
Annual Compensation Awards
Other Annual Securities Underlying
Name and Fiscal Salary Bonus Compensation Number of Options
Principal Position Year ($)(1) ($) ($) (2) # (3)
Wayland H.Cato,Jr. 1994 $437,032 $ - -- --
Chief Executive 1993 399,532 320,000 -- --
Officer 1992 374,532 300,000 -- --
Linda McFarland 1994 $385,298 $ - -- 50,000
Jenkins 1993 334,423 210,000 -- 75,000
President and Chief 1992 272,815 150,000 -- 75,000
Operating Officer
John P.Derham Cato 1994 $214,532 $ - -- 25,000
Executive Vice 1993 194,532 135,000 -- 22,500
President, 1992 173,432 90,000 -- --
President and General Manager
It's Fashion! Division
Alan E. Wiley(4) 1994 $193,260 $ - -- 20,000
Executive Vice 1993 170,353 62,000 $95,267(5) 22,500
President,Secretary 1992 80,301 25,000 22,047(4) 56,250
Chief Financial and
Administrative Officer
David Kempert 1994 $189,123 $ - -- 20,000
Executive Vice 1993 175,316 70,000 -- 22,500
President - Chief 1992 162,548 80,000 -- --
Store Operations Officer
______________
(1) Does not include amounts deducted pursuant to Internal
Revenue Code Section 125.
(2) Excludes perquisites and other personal benefits, securities
or property which, in the aggregate, did not exceed the
lesser of $50,000 or 10% of the annual salary
and bonus for each named executive officer.
(3) Options to purchase Class A Stock were granted to the named
executive officers at the fair market value of the Class A
Stock on the date of grant. The options vest in equal amounts
over five years from the date of grant and expire
ten years from the date of grant. All option grants have
been adjusted to reflect a three-for-two stock split effective
June 28, 1993.
(4) Mr. Wiley joined the Company in July 1992.
(5) Relocation related expenses.
Severance Agreement
The Company has a severance agreement with Ms. McFarland
Jenkins which currently provides for the continuation of her
annual salary for one year upon the termination of her employment
without cause. The Company has severance agreements with Mr.
Wiley and Mr. Kempert which currently provide for the
continuation of their salaries for six months upon the
termination of their employment without cause.
Option Grants in Last Fiscal Year