UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No.                                         )

 

 

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[  ]      Definitive Proxy Statement

[  ]      Definitive Additional Materials

[  ]      Soliciting Material Pursuant to §240.14a-12

 

The CATO Corporation

(Name of Registrant as Specified In Its Charter)

 

 

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

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April 20, 2020

 

 

 

 

Dear Shareholder:

 

The Annual Meeting of Shareholders to be held at the Corporate Office of the Company, 8100 Denmark Road, Charlotte, North Carolina 28273 on Thursday, May 21, 2020 at 11:00 A.M., Eastern Time.

 

The Notice of the Annual Meeting of Shareholders and Proxy Statement are attached. The matters to be acted upon by our shareholders are set forth in the Notice of Annual Meeting of Shareholders and discussed in the Proxy Statement.

 

We would appreciate your signing, dating, and returning to the Company the enclosed proxy card in the enclosed postage paid envelope or voting online or telephonically at your earliest convenience.

 

Although we still intend to hold the Annual Meeting in person, we are actively monitoring developments related to the coronavirus (COVID-19) and are sensitive to the public health concerns and the protocols that federal, state and local governments may impose. In the event that alternative arrangements for our Annual Meeting become required or advisable, we will announce these arrangements as promptly as practicable, which may include holding the meeting partially or solely by means of remote communication. Please monitor our website at www.catofashions.com/info/investor-relations for updated information and check the website in advance of the meeting. Please retain your 16-digit control number, which can be found on your proxy card and on the instructions that accompanied your proxy materials, as this control number will be necessary to facilitate your remote participation if the meeting format is changed.

 

Sincerely yours,

JOHN P. D. CATO

Chairman, President and Chief Executive Officer

 

8100 Denmark Road

P.  O. Box 34216

Charlotte, NC 28234

(704) 554-8510


 

The Cato Corporation

 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 21, 2020

 

 

 

TO THE SHAREHOLDERS OF THE CATO CORPORATION

 

Notice is hereby given that the Annual Meeting of Shareholders of The Cato Corporation (the “Company”) will be held on Thursday, May 21, 2020 at 11:00 A.M., Eastern Time, at the Corporate Office of the Company, 8100 Denmark Road, Charlotte, North Carolina 28273, for the following purposes:

 

1.     To elect as Directors of the Board Pamela L. Davies, Thomas B. Henson and Bryan F. Kennedy, III, each for a term expiring in 2023 and until their successors are elected and qualified;

 

2.     To approve the Company’s Amended and Restated Certificate of Incorporation to provide the Board the power to adopt, amend or repeal the Companys By-Laws, as amended (the “Bylaws), along with certain technical changes, to align with a majority of public companies;

 

3.     To ratify the Boards previously adopted amendments to the Bylaws, including:

 

a.     To vest the Chairman and Chief Executive Officer with authority to appoint other officers and reassign duties, similar to many public companies (adopted on January 28, 1993);

 

b.     To authorize the Company to issue uncertificated shares, as required by New York Stock Exchange rule (adopted on December 6, 2007); and

 

c.     To change the maximum days in advance of a stockholder meeting, dividend payment or other events that a record date may be set from not more than fifty (50) days in advance to not more than sixty (60) days in advance, in accordance with Delaware law (adopted on February 26, 2009).

 

4.     To approve the Companys Amended and Restated Bylaws;

 

5.     To approve, on an advisory basis, the Company’s executive compensation;

 

6.     To ratify the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending January 30, 2021;

 

7.     To consider and act upon such other business as may properly come before the Annual Meeting or any adjournment thereof.

 

The Board of Directors has fixed the close of business on March 23, 2020 as the record date for determination of shareholders entitled to notice of, and to vote, at the meeting or any adjournments thereof.

 

The foregoing items of business are more fully described in the Proxy Statement accompanying this notice. As described in the Proxy Statement, although our current certificate of incorporation does not include a provision providing our board of directors the power to adopt, amend or repeal our Bylaws, since the time of our initial public offering in 1987, our Board has amended our Bylaws to effect the following changes:

 

     to vest the Chairman and Chief Executive Officer with authority to appoint other officers and reassign duties (adopted on January 28, 1993);

 

     to authorize the Compantissuuncertificated shares, as requirebNeYorStocExchangrule (adopted on December 6, 2007); and


 

 

 

     To change the date range for setting a record date from not more than fifty (50) nor less than ten (10) days prior to the meeting or date for payment to not more than sixty (60) nor less than ten (10) days in advance (adopted on February 26, 2009).

 

Our Board has determined that it is in the best interest of the Company and our stockholders to ratify, and has approved the ratification of, each of these Bylaw amendments in accordance with Section 204 of the Delaware General Corporation Law (“DGCL”) and Delaware common law. This notice constitutes the notice required to be given to our stockholders under Section 204 of the DGCL in connection with such ratification. Under Section 204 of the DGCL, when a matter is submitted for ratification at a stockholder meeting, any claim that a defective corporate act ratified under Section 204 is void or voidable due to the failure of authorization, or that the Delaware Court of Chancery should declare in its discretion that a ratification in accordance with Section 204 of the DGCL not be effective or be effective only on certain conditions, must be brought within 120 days from the validation effective time, which would be the time the stockholders approve the ratification.

 

Although we still intend to hold the Annual Meeting in person, we are actively monitoring developments related to the coronavirus (COVID-19) and are sensitive to the public health concerns and the protocols that federal, state and local governments may impose. In the event that alternative arrangements for our Annual Meeting become required or advisable, we will announce these arrangements as promptly as practicable, which may include holding the meeting partially or solely by means of remote communication. Please monitor our website at www.catofashions.com/info/investor-relations for updated information and check the website in advance of the meeting. Please retain your 16-digit control number, which can be found on your proxy card and on the instructions that accompanied your proxy materials, as this control number will be necessary to facilitate your remote participation if the meeting format is changed.

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 21, 2020:

 

This Proxy Statement, the accompanying proxy card and The Cato Corporation Annual Report on Form 10-K for the 2019 fiscal year is available at:

 

www.catofashions.com/info/investor-relations

 

By Order of the Board of Directors

Christin J. Reische

Assistant Secretary

 

Dated: April 20, 2020

                                                                                                                                             

SHAREHOLDERS ARE URGED TO SIGN AND MAIL THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE PAID ENVELOPE OR VOTE ONLINE OR TELEPHONICALLY 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

 

 

PROXY STATEMENT

 

 

This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors (the “Board) of The Cato Corporation (the “Company”) for use at the Annual Meeting of Shareholders of the Company (the “meeting”) to be held on May 21, 2020, and at any adjournment or adjournments thereof. This Proxy Statement and the accompanying proxy card are first being mailed to shareholders on or about April 20, 2020.

 

Only shareholders of record at the close of business on March 23, 2020 are entitled to notice of and to vote at the meeting. As of March 23, 2020, the Company had outstanding and entitled to vote 21,881,638 shares of Class A Common Stock (“Class A Stock”) and 1,763,652 shares of Class B Common Stock (“Class B Stock”). 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 and holders of Class B Stock vote as a single class.

 

In the event that alternative arrangements for the meeting become required or advisable, we will announce these arrangements as promptly as practicable, which may include holding the meeting partially or solely by means of remote communication. Please monitor our website at www.catofashions.com/info/investor-relations for updated information and check the website in advance of the meeting. Please retain your 16-digit control number, which can be found on your proxy card and on the instructions that accompanied your proxy materials, as this control number will be necessary to facilitate your remote participation if the meeting format is changed.

 

All proxies properly executed and received prior to the meeting will be voted at the meeting. If a shareholder 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 election of nominees Pamela L. Davies, Thomas B. Henson and Bryan F. Kennedy, III, FOR approval of the Company’s Amended and Restated Certificate of Incorporation to expressly authorize the Board to amend the Company’s Bylaws, as amended, along with certain technical changes, FOR ratification of the Boards previously adopted amendments to the Bylaws, FOR approval of the Company’s Amended and Restated Bylaws, FOR the resolution approving the Companys executive compensation program, and FOR the  ratification  of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the year ending January 30, 2021. A proxy may be revoked at any time prior to its exercise by written notice to the Secretary of the Company at the Corporate Office 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 and broker non-votes are counted for purposes of determining the presence or absence of a quorum. Broker non-votes arise when beneficial shareholders do not give their banks, brokers or other nominees instructions for voting their shares and the banks, brokers or other nominees do not have authority to vote the shares on a matter because the matter is not considered routine. The only such routine item on the ballot for which uninstructed banks or other nominees may vote is the ratification of the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm.

 

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. Abstentions and broker non-votes are not counted for purposes of election of directors. The affirmative vote of 66 2/3% of the combined voting power of the Class A Stock and Class B Stock entitled to vote is required to approve the Company’s Amended and Restated Certificate of Incorporation. The affirmative vote of a majority of the combined voting power of the Class

 

1


 

 

A Stock and Class B Stock entitled to vote is required to ratify each of the Board’s previously adopted amendments to the Bylaws. The affirmative vote of a majority of the combined voting power of the Class A Stock and Class B Stock entitled to vote is required to approve the Company’s Amended and Restated Bylaws. 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 by proxy at the meeting and entitled to vote is required to approve the non-binding advisory vote on the Company’s executive compensation. The ratification of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm 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 by proxy at the meeting and entitled to vote. On any proposal other than the election of directors, abstentions and broker non-votes will have the same effect as a vote against the proposal.

 

The Company will bear the cost of this solicitation including the expense of preparing, printing, and mailing these proxy materials to shareholders. 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. The Company has also retained Georgeson, LLC., a proxy solicitation firm, to assist in the solicitation of proxies for a fee of $9,500.00 plus reasonable out-of-pocket expenses.

 

The independent election inspector(s) appointed for the Annual Meeting will determine whether or not a quorum is present and will tabulate votes cast by proxy or in person at the Annual Meeting.

 

These proxy materials are available in PDF and HTML format at www.catofashions.com/info/investor-relations and will remain posted until the conclusion of the meeting. Information on the Companys website, however, does not form a part of this Proxy Statement.

 

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SECURITY OWNERSHIP OF CERTAIN OWNERS AND MANAGEMENT

 

The following table sets forth, as of March 23, 2020, 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) each executive officer listed in the Summary Compensation Table, and (iv) all directors and executive officers as a group. Unless otherwise indicated in the footnotes below, each shareholder named has sole voting and investment power with respect to such shareholders shares. Unless otherwise indicated, the address of each shareholder listed below is 8100 Denmark Road, Charlotte, North Carolina 28273.

 

 

 

Shares Beneficially Owned (1)

Percent

 

Class A Stock

Class B Stock

of Total

Name of Beneficial Owner

  Number  

Percent       of Class

  Number 

Percent

 of Class  

Voting  Power  

 

 

 

 

 

 

 

John P. D. Cato (2)

 

753,102

3.4

1,763,652

100.0

46.5

John R. Howe 

 

134,170

*

--

--

*

M. Tim Greer

 

81,044

*

--

--

*

Gordon D. Smith

 

73,479

*

--

--

*

Thomas B. Henson

 

21,380

*

--

--

*

Bryan F. Kennedy, III

 

17,588

*

--

--

*

Thomas E. Meckley

 

19,392

*

--

--

*

Bailey W. Patrick

 

20,392

*

--

--

*

D. Harding Stowe

 

30,726

*

--

--

*

Pamela L. Davies

 

6,724

*

--

--

*

Theresa J. Drew

 

           3,095

*

--

--

*

All directors, nominees and executive officers

    as a group (11 persons)

 

   1,161,092

5.3

1,763,652

100.0

47.6

BlackRock, Inc. (3)

 

    3,546,735

16.2

--

--

9.0

The Vanguard Group, Inc. (4)

 

    1,421,951

6.5

--

--

3.6

Wellington Management Group, LLP, et al. (5)

 

    1,339,906

6.1

--

--

3.4

Dimensional Fund Advisors, LP (6)

 

    1,928,079

8.8

--

--

4.9

 

 

 

 

 

 

 

               

 

*     Less than 1%

 

(1)     Includes the vested interest of executive officers in the Company’s Employee Stock Ownership Plan and Employee Stock Purchase Plan. The aggregate vested amount credited to their accounts as of March 23, 2020 was 101,247 shares of Class A Stock.

 

(2)     The amount shown for Class A Stock and Class B Stock includes 14,762 shares and 3,000 shares, respectively, held by Mr.

Cato’s wife. Mr. Cato disclaims beneficial ownership of shares held directly or indirectly by his wife.

 

(3)     Based on an amended Schedule 13G filed by this shareholder with the Securities and Exchange Commission on or about February 3, 2020. The address of this shareholder is 55 East 52nd Street, New York, NY 10055. This shareholder reports sole voting power over 3,471,565 of the reported shares.

 

(4)     Based on an amended Schedule 13G filed by this shareholder with the Securities and Exchange Commission on or about February 10, 2020. The address of this shareholder is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. This shareholder reports shared dispositive power with respect to 19,993 of the reported shares and shared voting power with respect to 1,672 of the reported shares.

 

(5)     Based on an amended Schedule 13G filed by this shareholder with the Securities and Exchange Commission on or about January 8, 2020. The address of this shareholder is 280 Congress Street, Boston, Massachus