2437 East Main Street
Plainfield, Indiana

                                [GRAPHIC MISSING]
                                     GALYANS
                                SPORTS & OUTDOOR

                               ONE GALYANS PARKWAY
                            PLAINFIELD, INDIANA 46168
Dear Shareholder:


         You are cordially invited to attend the Annual Meeting of Shareholders
of Galyan’sGalyan's Trading Company, Inc., which will be held at The Westin Hotel, 50 S. Capitol Avenue, Indianapolis,the Company's
headquarters at One Galyans Parkway, Plainfield, Indiana 4620446168 on Thursday,Friday, May
15, 200321, 2004 at 9:00 a.m., local time.


         At the Annual Meeting, holders of common stock will vote upon the
election of twelve directors.directors, the approval of grants of equity awards to our
Chief Executive Officer, and an amendment to our stock option plan. The attached
proxy statement contains information about thisthese and other matters pertaining to
the Annual Meeting.


         Whether or not you plan to attend, you can ensure that your shares are
represented at the meeting by promptly voting and submitting your proxy by
Internet, by telephone, or by completing, executing and returning the enclosed proxy card.


         I hope you will be able to attend the Annual Meeting and look forward
to seeing you on May 15, 2003.

Robert B. Mang
Chairman of the Company and
Chief Executive Officer
21, 2004.

                              /S/ EDWIN J. HOLMAN
                              Edwin J. Holman
                              CHIEF EXECUTIVE OFFICER

April 25, 2003
30, 2004

GALYAN’S

                                             GALYAN'S TRADING COMPANY, INC.
2437 East Main Street
Plainfield, Indiana
                                                   ONE GALYANS PARKWAY
                                                PLAINFIELD, INDIANA 46168
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 15, 2003
     Galyan’s21, 2004

         Galyan's Trading Company, Inc. will hold its Annual Meeting of
Shareholders on Thursday,Friday, May 15, 200321, 2004 at The Westin Hotel, 50 S. Capitol Avenue, Indianapolis,One Galyans Parkway, Plainfield, Indiana
4620446168 at 9:00 a.m., local time, for the following purposes:
1.
To elect twelve directors; and
2.


         1. To elect twelve directors;

         2. To consider approval of a stock option grant to our Chief Executive
Officer;

         3. To consider approval of a restricted stock grant to our Chief
Executive Officer;

         4. To consider approval of amendments to our stock option plan; and

         5. To transact such other business as may properly come before the
meeting.


         Only shareholders who owned stock at the close of business on March 24, 200329,
2004 can vote at this meeting or any adjournments that may take place. Even
though you may plan to attend the meeting, we ask that you vote your shares by
signing and dating the enclosed proxy card, and returning it without delay in
the enclosed postage-paid envelope. Alternatively, you may vote your shares by Internet or telephone. If you attend the meeting, you may withdraw
your proxy and vote in person.


         Please vote your shares promptly so that your shares may be present at
the meeting.
By Order of the Board of Directors,

C. David Zoba
Executive Vice President,
General Counsel and Secretary


By Order of the Board of Directors,

                         /S/ C. DAVID ZOBA
                         C. David Zoba
                         EXECUTIVE VICE PRESIDENT,
                         GENERAL COUNSEL AND SECRETARY


April 25, 2003
30, 2004

GALYAN’S

                         GALYAN'S TRADING COMPANY, INC.
2437 East Main Street
Plainfield, Indiana
                               ONE GALYANS PARKWAY
                            PLAINFIELD, INDIANA 46168
PROXY STATEMENT
General


GENERAL
         We are sending you this proxy statement as part of a solicitation by
the Board of Directors (the "Board") of Galyan’sGalyan's Trading Company, Inc.
("Galyan's") for use at our 20032004 Annual Meeting of Shareholders. We will hold
the meeting on Thursday,Friday, May 15, 200321, 2004 at The Westin Hotel, 50 S. Capitol Avenue, Indianapolis,One Galyans Parkway, Plainfield, Indiana
46204,46168, starting at 9:00 a.m., local time.


         We will mail this proxy statement and accompanying proxy card on or
about April 25, 200330, 2004 to all of our shareholders entitled to vote at the meeting.
Unless the context otherwise requires, the terms “us,” “we,” “our”"us," "we," "our" and “Company”"Company"
refer to Galyan’sGalyan's and its subsidiary.
subsidiaries.

                QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS
AND THE MEETING
Q:
Why am I receiving these materials?
A:
The Board is providing these proxy materials to you in connection with the Annual Meeting of Shareholders, which will take place on May 15, 2003. As the owner of shares on the record date for the meeting, you are invited to attend the meeting and are entitled to and requested to vote on the matters described in this proxy statement.
Q:
What information is contained in these materials?
A:
This proxy statement includes information on the nominees for election for director. The proxy statement also includes information on the voting process and requirements, the compensation of directors and some of our executive officers, and certain other required information.
Q:
Who can attend the meeting?
A:
All holders of shares of our common stock outstanding as of the close of business on March 24, 2003 (the “Record Date”) may attend.
Q:
What can I vote on at the meeting?
A:
There is one matter scheduled to be voted on at the meeting:

The election of twelve directors to our Board, each of whom will serve a one-year term and until their successors are elected and qualified.
Q:
How does the Board recommend that I vote on this matter?
A:
Our Board recommends that you vote your sharesFORall of the director nominees listed in this proxy statement.
Q:
What classes of shares are entitled to be voted?
A:
Each share of our common stock outstanding on the Record Date is entitled to vote on all items being voted on at the meeting. On the Record Date, we had 17,084,716 shares of common stock outstanding.


Q:       WHY AM I RECEIVING THESE MATERIALS?

A:       The Board is providing these proxy materials to you in connection with
         the Annual Meeting of Shareholders, which will take place on May 21,
         2004. As the owner of shares on the Record Date for the meeting (as
         defined below), you are invited to attend the meeting and are entitled
         to and requested to vote on the matters described in this proxy
         statement.

Q:       WHAT INFORMATION IS CONTAINED IN THESE MATERIALS?

A:       This proxy statement includes information on the nominees for election
         for director, a proposal to approve a stock option agreement with our
         Chief Executive Officer, a proposal to approve a restricted stock grant
         to our Chief Executive Officer and a proposal to approve amendments to
         our stock option plan. The proxy statement also includes information on
         the voting process and requirements, the compensation of directors and
         some of our executive officers, and certain other required information.

Q:       WHO CAN ATTEND THE MEETING?

A:       All holders of shares of our common stock outstanding as of the close
         of business on March 29, 2004 (the "Record Date") may attend.

Q:       WHAT CAN I VOTE ON AT THE MEETING?

A:       There are four matters scheduled to be voted on at the meeting:

         (1) The election of twelve directors to our Board, each of whom will
             serve a one-year term and until their successors are elected and
             qualified;

         (2) The approval of a grant, made outside of our stock option plan, to
             our Chief Executive Officer of 100,000 options to acquire our
             common stock;

                                        1
                                     
Q:
What shares can I vote?
A:
You can vote all the shares that you owned on the Record Date. These shares include: (1) shares held directly in your name as the shareholder of record, (2) shares held for you as the beneficial owner through a stockbroker, bank or other nominee and (3) for current or former Galyan’s employees, shares attributed to your account in the Galyan’s Trading Company Savings and Retirement Plan (the “Savings Plan”). If you are an employee of Galyan’s



         (3) The approval of a grant of 50,000 restricted shares of common
             stock; and

         (4) The approval of amendments to our stock option plan which
             authorize, in addition to the issuance of options, the issuance of
             restricted stock and other awards to our employees.

Q:       HOW DOES THE BOARD RECOMMEND THAT I VOTE ON THESE MATTERS?

A:       Our Board recommends that you vote your shares FOR each of the four
         matters scheduled to be voted on at the meeting.

Q:       WHAT CLASSES OF SHARES ARE ENTITLED TO BE VOTED?

A:       Each share of our common stock outstanding on the Record Date is
         entitled to vote on all items being voted on at the meeting. On the
         Record Date, we had 17,362,368 shares of common stock outstanding.

Q:       WHAT SHARES CAN I VOTE?

A:       You can vote all the shares that you owned on the Record Date. These
         shares include: (1) shares held directly in your name as the
         shareholder of record, (2) shares held for you as the beneficial owner
         through a stockbroker, bank or other nominee and (3) for current or
         former Galyan's employees, shares attributed to your account in the
         Galyan's Trading Company Savings and Retirement Plan (the "Savings
         Plan"). If you are an employee of Galyan's who has purchased shares
         under the Galyan's Employee Stock Purchase Plan ("ESPP"), and you hold
         those shares in the brokerage account established under the ESPP, those
         shares are held for you as beneficial owner through the administrator
         of the ESPP.

Q:       WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A SHAREHOLDER OF
         RECORD AND AS A BENEFICIAL OWNER?

A:       Most of our shareholders hold their shares through a stockbroker, bank
         or other nominee rather than directly in their own name. As summarized
         below, there are some distinctions between shares held of record and
         those owned beneficially. (For information for holders of shares
         attributed to a Savings Plan account, see "How do I provide voting
         instructions for shares in my Savings Plan account?" below.)

         SHAREHOLDER OF RECORD
         If your shares are registered in your name with our transfer agent,
         U.S. Stock Transfer Corporation, you are considered a shareholder of
         record with respect to those shares, and you are receiving these proxy
         materials directly from us. As the shareholder of record, you have the
         right to grant your voting proxy directly to us or to vote in person at
         the meeting. We have enclosed a proxy card for you to use.

         BENEFICIAL OWNER
         If your shares are held in a stock brokerage account, by a bank or
         other nominee (commonly referred to as being held in "street name"),
         you are considered to be the beneficial owner of those shares, and
         these proxy materials are being forwarded to you by your broker, bank
         or nominee as the shareholder of record. As the beneficial owner, you
         have the right to direct your broker, bank or other nominee how to vote
         your shares and are also invited to attend the meeting. However, since
         you are not the shareholder of record, you may not vote your shares in
         person at the meeting unless you obtain a signed proxy from the record
         holder giving you the right to vote the shares. Your broker or nominee
         has enclosed or provided a voting instruction card for you to use in
         directing the broker or nominee how to vote your shares. As indicated
         above, if you are an employee of Galyan's who has purchased shares
         under the

                                        Galyan’s Employee Stock Purchase Plan (“ESPP”), and you hold those shares in the brokerage account established under the ESPP, those shares are held for you as beneficial owner through the administrator of the ESPP.
Q:
What is the difference between holding shares as a shareholder of record and as a beneficial owner?
A:
Most of our shareholders hold their shares through a stockbroker, bank or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially. (For information for holders of shares attributed to a Savings Plan account, see “How do I provide voting instructions for shares in my Savings Plan account?” below.)

Shareholder of Record
If your shares are registered in your name with our transfer agent, U.S. Stock Transfer Corporation, you are considered a shareholder of record with respect to those shares, and you are receiving these proxy materials directly from us. As the shareholder of record, you have the right to grant your voting proxy directly to us or to vote in person at the meeting. We have enclosed a proxy card for you to use.

Beneficial Owner
If your shares are held in a stock brokerage account, by a bank or other nominee (commonly referred to as being held in “street name”), you are considered to be the beneficial owner of those shares, and these proxy materials are being forwarded to you by your broker, bank or nominee as the shareholder of record. As the beneficial owner, you have the right to direct your broker, bank or other nominee how to vote your shares and are also invited to attend the meeting. However, since you are not the shareholder of record, you may not vote your shares in person at the meeting unless you obtain a signed proxy from the record holder giving you the right to vote the shares. Your broker or nominee has enclosed or provided a voting instruction card for you to use in directing the broker or nominee how to vote your shares. As indicated above, if you are an employee of Galyan’s who has purchased shares under the Galyan’s ESPP, you are considered the beneficial owner of the shares in the brokerage account established under the ESPP.
Q:
How do I vote?
A:
For holders of record and beneficial owners, there are three ways that you can vote:
(1)   
You can sign and date each proxy card that you receive and return it in the prepaid envelope that comes with the proxy card.
(2)
You can vote through the Internet or telephone voting systems, more fully described on your proxy card. The deadline for voting is 11:59 p.m. Eastern Time, May 14, 2003.
(3)
If you are a shareholder of record, you can vote in person at the meeting. If you are the beneficial owner, and not the shareholder of record, you must notify your broker, bank or other nominee and obtain a signed proxy from the shareholder of record giving you the right to vote the shares.
Q:
How do I provide voting instructions for shares in my Savings Plan account?
A:
If you have shares attributed to your account in the Savings Plan, you have the right to direct the plan trustee how to vote the shares attributed to your account. The plan trustee has enclosed or provided a voting instruction card (which looks similar to the proxy card) for you to use in directing the trustee how to vote the shares in your account. There are two ways that you can vote: (1) you can sign and date the voting instruction card that you receive and return it in the prepaid envelope that comes with the voting instruction card, or (2) you can vote through the Internet or telephone voting systems, more fully described on your
2
voting instruction card. The deadline, or cut-off date, for providing voting instructions to the plan trustee is 11:59 p.m. Eastern Time, May 12, 2003. If your instructions are not received by that date, the trustee will not vote the shares attributed to your account.
Q:
Can I change my vote or revoke my proxy?
A:
Yes. You can revoke your proxy or change any votes you cast using the telephone or Internet voting systems. To do this, you must do one of the following before the votes are cast at the meeting: (1) deliver a written notice of your revocation to our Corporate Secretary at our principal executive office, 2437 East Main Street, Plainfield, Indiana 46168, (2) execute and deliver a later dated proxy, or (3) cast a later vote using the telephone or Internet voting systems. Alternatively, you can attend the meeting and vote in person.
Q:
What does it mean if I get more than one proxy card?
A:
It means that you hold shares registered in more than one account (including shares attributed to your Savings Plan account). Sign and return all proxies or vote using the telephone or Internet voting system for each proxy card that you get to ensure that all of your shares are voted.
Q:
What is the quorum requirement for the meeting?
A:
For a “quorum”

         Galyan's ESPP, you are considered the beneficial owner of the shares in
         the brokerage account established under the ESPP.

Q:       HOW DO I VOTE?

A:       For holders of record and beneficial owners, there are two ways that
         you can vote:

         (1) You can sign and date each proxy card that you receive and return
             it in the prepaid envelope that comes with the proxy card.

         (2) If you are a shareholder of record, you can vote in person at the
             meeting. If you are the beneficial owner, and not the shareholder
             of record, and you wish to vote your shares in person at the
             meeting, you must notify your broker, bank or other nominee and
             obtain a signed proxy from the shareholder of record giving you the
             right to vote the shares.

Q:       HOW DO I PROVIDE VOTING INSTRUCTIONS FOR SHARES IN MY SAVINGS PLAN
         ACCOUNT?

A:       If you have shares attributed to your account in the Savings Plan, you
         have the right to direct the plan trustee how to vote the shares
         attributed to your account. The plan trustee has enclosed or provided a
         voting instruction card (which looks similar to the proxy card) for you
         to use in directing the trustee how to vote the shares in your account.
         You can sign and date the voting instruction card that you receive and
         return it in the prepaid envelope that comes with the voting
         instruction card. The deadline, or cut-off date, for providing voting
         instructions to the plan trustee is 11:59 p.m. Eastern Time, May 18,
         2004. If your instructions are not received by that date, the trustee
         will not vote the shares attributed to your account.

Q:       CAN I CHANGE MY VOTE OR REVOKE MY PROXY?

A:       Yes. You can revoke your proxy. To do this, you must do one of the
         following before the votes are cast at the meeting: (1) deliver a
         written notice of your revocation to our Corporate Secretary at our
         principal executive office, One Galyans Parkway, Plainfield, Indiana
         46168, and (2) execute and deliver a later dated proxy. Alternatively,
         you can attend the meeting and vote in person.

Q:       WHAT DOES IT MEAN IF I GET MORE THAN ONE PROXY CARD?

A:       It means that you hold shares registered in more than one account
         (including shares attributed to your Savings Plan account). Sign and
         return each proxy card that you get to ensure that all of your shares
         are voted.

Q:       WHAT IS THE QUORUM REQUIREMENT FOR THE MEETING?

A:       For a "quorum" to exist at the meeting, shareholders holding a majority
         of the votes entitled to be cast by the shareholders entitled to vote
         generally must be present in person or represented by proxy at the
         meeting. There must be a quorum for any action to be taken at the
         meeting (other than adjournment or postponement of the meeting). If you
         submit a properly executed proxy card, even if you abstain from voting,
         then your shares will be counted for purposes of determining the
         presence of a quorum. If a broker indicates on a proxy that it lacks
         discretionary authority as to certain shares to vote on a particular
         matter, commonly referred to as "broker non-votes," those shares will
         still be counted for purposes of determining the presence of a quorum
         at the meeting.


                                        There must be a quorum for any action to be taken at the meeting (other than adjournment or postponement of the meeting). If you submit a properly executed proxy card, even if you abstain from voting, then your shares will be counted for purposes of determining the presence of a quorum. If a broker indicates on a proxy that it lacks discretionary authority as to certain shares to vote on a particular matter, commonly referred to as “broker non-votes,” those shares will still be counted for purposes of determining the presence of a quorum at the meeting.
Q:
What is the voting requirement to approve each of the matters?
A:
In the election of directors, assuming the presence of a quorum, the twelve persons receiving the highest number of votes will be elected. If you are a beneficial owner and do not provide the shareholder of record with voting instructions, your shares may constitute broker non-votes (as described in the answer to the prior question) with respect to certain matters. In tabulating the voting result for any particular proposal, abstentions and shares that constitute broker non-votes will not have any effect on the outcome of the vote.
Q:
How can I vote?
A:
In the election of directors, you may voteFORall of the nominees, or your vote may beWITHHELDwith respect to one or more of the nominees.
Q:
How will the votes be counted?
A:
Your shares of common stock will be voted according to your directions on the proxy card, or broker voting instruction card, or as you direct pursuant to the telephone or Internet voting systems. If you sign your proxy card or broker voting instruction card with no further instructions, your shares will be voted in accordance with the recommendations of our Board (FORall director nominees named in the proxy statement).
Q:
Who will count the votes?
A:
We have appointed three individuals to serve as inspectors of election for the meeting. The election inspectors will determine the presence of a quorum, tabulate votes, certify the results of the election and take such other actions as may be necessary or appropriate to conduct the election.
3
Q:
How will voting on any other business be conducted?
A:
We do not currently expect any matters to be presented for a vote at the meeting, other than the election of directors described in the proxy statement. If you grant a proxy, the officers named as proxy holders, C. David Zoba and Ed Wozniak, or their nominees or substitutes, will have the discretion to vote your shares on any additional matters that are properly presented for a vote at the meeting. If, for any unforeseen reason, any of our nominees is not available as a candidate for director, the person named as the proxy holder will vote your proxy for another candidate or other candidates nominated by our Board.
Q:
May I propose actions for consideration at next year’s Annual Meeting?
A:
Yes. For your proposal to be considered for inclusion in our proxy statement for next year’s meeting, we must receive your written proposal no later than December 26, 2003. If we change the date of next year’s meeting by more than 30 days from the date of this year’s meeting, then the deadline is a reasonable time before we begin to print and mail our proxy materials. You should also be aware that your proposal must comply with Securities and Exchange Commission regulations regarding inclusion of shareholder proposals in company-sponsored proxy materials.

Similarly, in order for you to raise a proposal (including a director nomination) from the floor during next year’s meeting, we must receive a written notice of the proposal no later than February 14, 2003 and it must contain the additional information required by our bylaws. If we change the date of next year’s meeting by more than 30 days before, or more than 70 days after, the date contemplated at this year’s meeting, then we must receive your written proposal at least 90 days before the date of next year’s meeting in order for the proposal to be timely. You may obtain a complete copy of our bylaws by submitting a written request to our Corporate Secretary at our principal executive office, 2437 East Main Street, Plainfield, Indiana 46168.
Q:
Can I receive next year’s meeting proxy statement and Annual Report online?
A:
Yes. Our proxy statement and Annual Report will be available online to shareholders of record who elect to vote by the Internet and follow the instructions on the Internet for viewing them online. Choosing this option will save our company the cost of producing and mailing these documents. If you choose this option, you will receive a proxy card in the mail next year with instructions containing the Internet address where the proxy statement and Annual Report are located. If you select to view the proxy statement and Annual Report on the Internet, we will not mail you paper copies of these documents next year. If you hold your shares through a bank, broker or other nominee, please refer to the information provided by that entity for instructions on how to elect to view future proxy statements and Annual Reports over the Internet. You do not have to elect Internet access each year. Rather, your choice will remain in effect until you contact us at 317-612-2437, by email at Investor_Relations@galyans.com or by mail at our principal executive office.
Q:
Who is paying for this proxy solicitation?
A:
We will pay the cost of soliciting the proxies. In addition, officers, directors and regular employees, who will not be paid any additional compensation for such activities, may make the solicitation of proxies or votes in person, by telephone or by electronic communication. We will send copies of the solicitation material to brokers, fiduciaries and custodians who will forward the material to the beneficial owners of our shares. On request, we will reimburse brokers and other persons representing beneficial owners of shares for their reasonable expenses in forwarding solicitation material to such beneficial owners.


Q:       HOW CAN I VOTE?

A:       In the election of directors, you may vote FOR all of the nominees, or
         your vote may be WITHHELD with respect to one or more of the nominees.
         For the other matters, you may vote FOR or AGAINST the matter, or you
         may indicate that you wish to ABSTAIN from voting on the matter.

Q:       HOW WILL THE VOTES BE COUNTED?

A:       Your shares of common stock will be voted according to your directions
         on the proxy card, or broker voting instruction card. If you sign your
         proxy card or broker voting instruction card with no further
         instructions, your shares will be voted in accordance with the
         recommendations of our Board (FOR all director nominees named in the
         proxy statement, FOR the approval of the option grant to our Chief
         Executive Officer, FOR the approval of the restricted stock grant to
         our Chief Executive Officer, and FOR the amendments to our stock option
         plan). If you ABSTAIN on a particular matter, your shares will not be
         counted in the vote with respect to that matter.

Q:       WHO WILL COUNT THE VOTES?

A:       We have appointed three individuals to serve as inspectors of election
         for the meeting. The election inspectors will determine the presence of
         a quorum, tabulate votes, certify the results of the election and take
         such other actions as may be necessary or appropriate to conduct the
         election.

Q:       HOW WILL VOTING ON ANY OTHER BUSINESS BE CONDUCTED?

A:       We do not currently expect any matters to be presented for a vote at
         the meeting, other than the three matters described in the proxy
         statement. If you grant a proxy, the officers named as proxy holders,
         C. David Zoba and Edward S. Wozniak, or their nominees or substitutes,
         will have the discretion to vote your shares on any additional matters
         that are properly presented for a vote at the meeting. If, for any
         unforeseen reason, any of our nominees is not available as a candidate
         for director, the person named as the proxy holder will vote your proxy
         for another candidate or other candidates nominated by our Board.

Q:       MAY I PROPOSE ACTIONS FOR CONSIDERATION AT NEXT YEAR'S ANNUAL MEETING?

A:       Yes. For your proposal to be considered for inclusion in our proxy
         statement for next year's meeting, we must receive your written
         proposal no later than December 31, 2004. If we change the date of next
         year's meeting by more than 30 days from the date of this year's
         meeting, then the deadline is a reasonable time before we begin to
         print and mail our proxy materials. You should also be aware that your
         proposal must comply with Securities and Exchange Commission
         regulations regarding inclusion of shareholder proposals in
         company-sponsored proxy materials. Similarly, in order for you to raise
         a proposal (including a director nomination) from the floor during next
         year's meeting, we must receive a written notice of the proposal no
         later than February 20, 2005 and it must contain the additional
         information required by our bylaws. If we change the date of next
         year's meeting by more than 30 days before, or more than 70 days after,
         the date contemplated at this year's meeting, then we must receive your
         written proposal at least 90 days before the date of next year's
         meeting in order for the proposal to be timely. You may obtain a
         complete copy of our bylaws by submitting a written request to our
         Corporate Secretary at our principal executive office, One Galyans
         Parkway, Plainfield, Indiana 46168.


                                        4



Q:       HOW CAN I COMMUNICATE WITH THE BOARD OF DIRECTORS?

A:       Shareholders or other interested parties can contact any non-management
         director of the Board by writing to them c/o Corporate Secretary,
         Galyan's Trading Company, Inc., One Galyans Parkway, Plainfield,
         Indiana 46168. The mailing envelope must contain a clear notation
         indicating that the enclosed letter is a "Stockholder-Board
         Communication" or "Stockholder-Director Communication." All such
         letters must identify the author as a stockholder and clearly state
         whether the intended recipients are all members of the Board of
         Directors or certain specified individual directors. The Secretary will
         make copies of all such letters and circulate them to the appropriate
         director or directors.

Q:       WHO IS PAYING FOR THIS PROXY SOLICITATION?

A:       We will pay the cost of soliciting the proxies. In addition, officers,
         directors and regular employees, who will not be paid any additional
         compensation for such activities, may make the solicitation of proxies
         or votes in person, by telephone or by electronic communication. We
         will send copies of the solicitation material to brokers, fiduciaries
         and custodians who will forward the material to the beneficial owners
         of our shares. On request, we will reimburse brokers and other persons
         representing beneficial owners of shares for their reasonable expenses
         in forwarding solicitation material to such beneficial owners.


                                        5
                                     BENEFICIAL OWNERSHIP OF SHARES OF COMMON STOCK


         The following contains information regarding the beneficial ownership
of our common stock as of March 15, 20032004 (unless otherwise noted) for:

         o each person known by us to beneficially own more than five percent of
         our common stock;


         o each director and nominee for director;


         o each of the executive officers named in the Summary Compensation
         Table on page 1225 of this proxy statement; and


         o all current directors and executive officers as a group.


         Beneficial ownership is determined in accordance with the rules of the
SEC and generally includes voting or investment power with respect to
securities. In computing the number of shares beneficially owned by a person and
the percentage of ownership held by that person, shares of common stock subject
to options and warrants held by that person that are currently exercisable or
will become exercisable within 60 days after March 15, 20032004 (i.e., May 14, 2003)2004)
are deemed outstanding, while these shares are not deemed outstanding for
computing the percentage ownership of any other person. Except as otherwise
indicated in the footnotes below, and except as may be provided under applicable
marital property laws, we believe, based on information furnished to us, the
persons and entities named in the table below have sole voting and investment
power with respect to all shares beneficially owned.


         The percentages of common stock beneficially owned are based on
17,084,71617,362,368 shares of common stock outstanding as of March 15, 2003.
Name and Address of
Beneficial Owner
Shares of
Common Stock
Beneficially
Owned
 
Percentage of
Common
Stock Beneficially
Owned
 
 
 
 
 
     
 
 
5% Shareholders:
 
 
 
 
 
 
FS Equity Partners IV, L.P
5,694,500
 
(1)(2)
 
33.3
%
Limited Brands, Inc
5,500,500
 
(2)(3)
 
29.8
 
Directors and executive officers:
 
 
 
 
 
 
Robert B. Mang
215,000
 
(4)
 
1.3
%
C. David Zoba
74,740
 
(5)
 
*
 
Edward S. Wozniak
40,501
 
(6)
 
*
 
Charles F. Nelson
70,117
 
(7)
 
*
 
Edward J. Whitehead
11,667
 
(8)
 
*
 
Norman S. Matthews
180,000
 
(9)
 
1.0
 
Byron E. Allumbaugh
13,334
 
(10)
 
*
 
Frank J. Belatti
3,334
 
(11)
 
*
 
Stuart B. Burgdoerfer
—
 
 
 
—
 
Timothy J. Faber
—
 
 
 
—
 
Todd W. Halloran
5,694,500
 
(2)(12)
 
33.3
 
George R. Mrkonic, Jr
13,334
 
(13)
 
*
 
John M. Roth
5,694,500
 
(2)(12)
 
33.3
 
Stephanie M. Shern
13,334
 
(14)
 
*
 
Ronald P. Spogli
5,694,500
 
(2)(12)
 
33.3
 
Peter Starrett
170,000
 
(15)
 
1.0
 
Directors and executive officers as a group (21 persons)
6,732,382
 
(16)
 
35.3
 
Former director and executive officer:
 
 
 
 
 
 
Joel L. Silverman
250,000
 
(17)
 
1.4
%
2004.

*
Represents beneficial ownership of less than 1%.
(1)     
Based on the information in a Schedule 13D filed October 9, 2001. This shareholder indicates that shares are held of record by

                                                                                 SHARES OF               PERCENTAGE OF
         NAME AND ADDRESS OF                                                     COMMON STOCK            COMMON STOCK
         BENEFICIAL OWNER                                                        BENEFICIALLY OWNED      BENEFICIALLY OWNED
         ------------------------------------------------------------------------------------------------------------------
         
         5% SHAREHOLDERS:
         FS Equity Partners IV, L.P., a Delaware limited partnership (“FS Equity IV”). FS Capital Partners LLC, a Delaware limited liability company, is
5
group (22 persons) .............  6,858,064   (19)              35.3
         * REPRESENTS BENEFICIAL OWNERSHIP OF LESS THAN 1%.
the general partner of FS Equity IV and has the power to vote and dispose of the shares held of record by FS Equity IV. The address for this shareholder is 11100 Santa Monica Boulevard, Suite 1900, Los Angeles, California 90025.
 ..........................................  5,694,500   (1)(2)            
This shareholder also indicates in a Schedule 13D filed October 9, 2001 that, as a result of the stockholders agreement among FS Equity IV,32.8%
         Limited Brands, Inc. (formerly known as The Limited,.................................................  5,250,500   (2)(3)            28.1
         Heartland Advisors, Inc. and hereafter, “Limited Brands”), G Trademark,.............................................    907,700   (4)                5.2
         Dimensional Fund Advisors Inc. (a wholly-owned subsidiary of Limited Brands, “G Trademark”), Benchmark Capital Partners IV, L.P. (“BCP IV”) and Galyan’s Trading Company, Inc., which agreement includes a provision whereby FS Equity IV, Limited Brands, G Trademark and BCP IV agree to vote all their shares in the election of certain directors, FS Equity IV, FS Capital Partners LLC, Limited Brands, G Trademark and BCP IV may be deemed to be a “group” within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended. In the aggregate, as of October 9, 2001, such persons reported shared voting power with respect to 11,762,684 shares, which represents beneficial ownership of 68.9% of the shares outstanding as of March 15, 2003, of which 10,412,684 shares are currently outstanding (which represents 61.0% of the shares outstanding as of March 15, 2003) and 1,350,000 are represented by a currently exercisable warrant held by Limited Brands that had an exercise price of $31.99 per share as of February 1, 2003.
(3)
Based on the information in a Schedule 13D filed October 9, 2001. This shareholder indicates that shares owned by Limited Brands include 550,500 shares held of record by Limited Brands, 1,350,000 shares subject to a warrant issued to Limited Brands that is currently exercisable (with an exercise price of $32.01 as of February 1, 2003) and 3,600,000 shares held of record by G Trademark. The address for Limited Brands and G Trademark is Three Limited Parkway, Columbus, Ohio 43230.
(4)
Includes 115,000 shares subject to options exercisable on or before May 14, 2003 and 100,000 shares owned by a family trust with respect to which Mr........................................    904,216   (5)                5.2
         DIRECTORS AND EXECUTIVE OFFICERS:
         Edwin J. Holman ......................................................    102,000   (6)                  *
         C. David Zoba ........................................................    118,406   (7)                  *
         Edward S. Wozniak ....................................................     65,057   (8)                  *
         Robert B. Mang has indirect beneficial ownership.
(5)
Includes 36,667 shares subject to options exercisable on or before May 14, 2003.
(6)
Includes 25,001 shares subject to options exercisable on or before May 14, 2003 and 15,500 shares owned by a family trust with respect to which Mr. Wozniak has indirect beneficial ownership.
(7)
Includes 35,334 shares subject to options exercisable on or before May 14, 2003.
(8)
Represents 11,667 shares subject to options exercisable on or before May 14, 2003.
(9)
Includes 120,000 shares subject to options exercisable on or before May 14, 2003.
 ...................................................    291,000   (10)
Includes 3,334 shares subject to options exercisable on or before May 14, 2003 and 10,000 shares held by a family trust with respect to which Mr.               1.7%
         Charles F. Nelson (11) ...............................................     62,248   (12)                 *
         Norman S. Matthews ...................................................    185,000   (13)               1.1
         Byron E. Allumbaugh has indirect beneficial ownership.
(11)
Includes 3,334 shares subject to options exercisable on or before May 14, 2003.
(12)
Mr...................................................     18,334   (14)                 *
         Frank J. Belatti .....................................................      8,334   (15)                 *
         Stuart B. Burgdoerfer ................................................         --                       --
         Timothy J. Faber .....................................................         --                       --
         Michael Goldstein ....................................................         --                       --
         Todd W. Halloran ..................................................... 5,694,500    (2)(16)           32.8
         George R. Mrkonic, Jr. ...............................................     18,334   (17)                 *
         John M. Roth ......................................................... 5,694,500    (2)(16)           32.8
         Ronald P. Spogli is the President and a Managing Member of FS Capital Partners LLC. Mr. Halloran and Mr. Roth are Vice Presidents and Managing Members of FS Capital Partners LLC. Accordingly, Messrs. Spogli, Halloran and Roth may be deemed to be beneficial owners of the shares of common stock held of record by FS Equity IV. Each of these persons disclaims beneficial ownership in the shares except to the extent of his pecuniary interest in them.
(13)
Includes 3,334 shares subject to options exercisable on or before May 14, 2003.
(14)
Includes 3,334 shares subject to options exercisable on or before May 14, 2003.
(15)
Includes 120,000 shares subject to options exercisable on or before May 14, 2003.
..................................................... 5,694,500    (2)(16)
Includes 651,540 shares subject to options exercisable on or before May 14, 2003 which are owned by individual directors           32.8
         Peter Starrett .......................................................    190,000   (18)               1.1
         Directors and executive officers. Also includes 5,694,500 shares held by FS Equity IV, the ownership of which could be attributed to Messrs. Spogli, Halloran and Roth. Each of these individuals disclaims beneficial ownership of these shares except to the extent of his pecuniary interest in them.
(17)
Includes 180,000 shares subject to options exercisable on or before May 14, 2003. Effective March 4, 2002, Mr. Silverman resignedofficers as a director and his employment terminated.


(1)      Based on the information in a Schedule 13D filed October 9, 2001, as
         amended through August 18, 2003. This shareholder indicates that shares
         are held of record by FS Equity Partners IV, L.P., a Delaware limited
         partnership ("FS Equity IV"). FS Capital Partners LLC, a Delaware
         limited liability company, is the general partner of FS Equity IV and
         has the power to vote and dispose of the shares held of record by FS
         Equity IV. The address for this shareholder is 11100 Santa Monica
         Boulevard, Suite 1900, Los Angeles, California 90025.


                                        6
                                     

(2)      This shareholder also indicates in a Schedule 13D filed October 9,
         2001, as amended through August 18, 2003, that, as a result of the
         stockholders agreement among FS Equity IV, Limited Brands, Inc.
         (formerly known as The Limited, Inc. and hereafter, "Limited Brands"),
         G Trademark, Inc. (a wholly owned subsidiary of Limited Brands, "G
         Trademark"), and Galyan's Trading Company, Inc., which agreement
         includes a provision whereby FS Equity IV L.P., Limited Brands and G
         Trademark agree to vote all their shares in the election of certain
         directors, FS Equity IV L.P., FS Capital Partners LLC, Limited Brands
         and G Trademark may be deemed to be a "group" within the meaning of
         Rule 13d-3 under the Securities Exchange Act of 1934, as amended. In
         the aggregate, as of August 18, 2003, such persons reported shared
         voting power with respect to 10,945,000 shares, which represents
         beneficial ownership of 60.9% of the shares outstanding as of March 15,
         2004, of which 9,595,000 shares are currently outstanding (which
         represents 55.3% of the shares outstanding as of March 15, 2004) and
         1,350,000 are represented by a currently exercisable warrant held by
         Limited Brands that had an exercise price of $44.82 per share as of
         January 31, 2004.
(3)      Based on the information in a Schedule 13D filed October 9, 2001, as
         amended through August 18, 2003. This shareholder indicates that shares
         owned by Limited Brands include 550,500 shares held of record by
         Limited Brands, 1,350,000 shares subject to a warrant issued to Limited
         Brands that is currently exercisable (with an exercise price of $44.82
         as of January 31, 2004) and 3,350,000 shares held of record by G
         Trademark. The address for Limited Brands and G Trademark is Three
         Limited Parkway, Columbus, Ohio 43230.
(4)      Based on the information in a Schedule 13G filed February 12, 2004.
         This shareholder and its Chief Executive Officer, William J. Nasgovitz,
         indicate that shares reported by them include 907,700 shares owned by
         advisory clients of Heartland Advisors, Inc., 862,700, or approximately
         five percent of Galyan's outstanding common stock as reported on the
         Form 10-Q filed by Galyan's on December 15, 2003, are held by The
         Heartland Value Fund, and, to the knowledge of Heartland Advisors,
         Inc., no other client of a reporting person owns more than five percent
         of Galyan's common stock. Heartland Advisors, Inc. disclaims beneficial
         ownership of all such securities.
(5)      Based on the information in a Schedule 13G filed February 6, 2004. This
         shareholder indicates that shares reported by Dimensional Fund Advisors
         Inc. include 904,216 shares owned by investment companies, trusts and
         separate accounts for which Dimensional Fund Advisors Inc. provides
         investment advice, and no one investment company, trust or separate
         account, to the knowledge of Dimensional Fund Advisors Inc., owns more
         than five percent of Galyan's common stock. Dimensional Fund Advisors
         Inc. disclaims beneficial ownership of all such securities.
(6)      Includes 100,000 restricted shares subject to a restricted stock
         agreement dated September 3, 2003.
(7)      Includes 80,333 shares subject to options exercisable on or before May
         14, 2004.
(8)      Includes 47,333 shares subject to options exercisable on or before May
         14, 2004, 15,500 shares owned by a family trust with respect to which
         Mr. Wozniak has indirect beneficial ownership and 2,224 shares
         purchased under our employee stock purchase plan.
(9)      Mr. Mang is one of our named executive officers for fiscal 2003 because
         he served as our Chief Executive Officer during fiscal 2003 (and until
         he resigned from that position on March 1, 2004). Mr. Mang currently
         serves as a director of the Company, but has agreed to resign as a
         director on or before May 14, 2004. He is also currently employed by
         the Company in an advisory (non-officer) capacity, and this employment
         arrangement is expected to terminate on or before May 31, 2004.
(10)     Includes 191,000 shares subject to options exercisable on or before May
         14, 2004 and 100,000 shares owned by a family trust with respect to
         which Mr. Mang has indirect beneficial ownership. Does not include
         109,000 options held by Mr. Mang that will become exercisable on May
         31, 2004, pursuant to his Resignation and General Release Agreement
         with the Company.
(11)     Mr. Nelson was Senior Vice President, Minister of Culture, and retired
         effective January 31, 2004.
(12)     Includes 37,000 shares subject to options exercisable on or before May
         14, 2004.
(13)     Includes 125,000 shares subject to options exercisable on or before May
         14, 2004.
(14)     Includes 8,334 shares subject to options exercisable on or before May
         14, 2004 and 10,000 shares held by a family trust with respect to which
         Mr. Allumbaugh has indirect beneficial ownership.
(15)     All 8,334 shares are subject to options exercisable on or before May
         14, 2004.
(16)     Mr. Spogli is the President and a Managing Member of FS Capital
         Partners LLC. Mr. Halloran and Mr. Roth are Vice Presidents and
         Managing Members of FS Capital Partners LLC. Accordingly, Messrs.
         Spogli, Halloran and Roth may be deemed to be beneficial owners of the
         shares of common stock held of record by FS Equity IV L.P.. Each of
         these persons disclaims beneficial ownership in the shares except to
         the extent of his pecuniary interest in them.
(17)     Includes 8,334 shares subject to options exercisable on or before May
         14, 2004.
(18)     Includes 120,000 shares subject to options exercisable on or before May
         14, 2004.
(19)     Includes 765,567 shares subject to options exercisable on or before May
         14, 2004 which are owned by individual directors and executive
         officers. Also includes 5,694,500 shares held by FS Equity IV, the
         ownership of which could be attributed to Messrs. Spogli, Halloran and
         Roth. Each of these individuals disclaims beneficial ownership of these
         shares except to the extent of his pecuniary interest in them. Excludes
         Mr. Nelson and the 62,348 shares held by Mr. Nelson, who retired
         effective January 31, 2004.


                               BOARD OF DIRECTORS
Meetings

MEETINGS AND COMMITTEES

         The Board of Directors has determined that Galyan's is a "controlled
company," as defined in Rule 4350(c)(5) of the listing standards of the National
Association of Securities Dealers, Inc. ("NASD"), based on the beneficial
ownership of FS Equity Partners IV, L.P. (hereafter, "Freeman Spogli") and
Committees
Limited Brands, Inc. (and its subsidiary, G Trademark Inc.) of approximately
55.3% of the common stock outstanding as of March 15, 2004, and the shareholders
agreement among Freeman Spogli, Limited Brands, G Trademark and the Company
(described below under the heading "Information Regarding Certain Directorships
and Voting Arrangements") requiring the parties to vote their shares in the
election of specified nominees to our Board of Directors. Accordingly, Galyan's
is exempt from certain requirements of the NASD listing standards, including the
requirement to maintain a majority of independent directors of Galyan's Board of
Directors and the requirements regarding the determination of compensation of
executive directors, the nomination of directors by independent directors and
the composition of our Compensation Committee or our Nominating and Governance
Committee.


                                        7
                                     

         The Board of Directors met four (4) times during fiscal 2002.2003, which
period began on February 2, 2003 and ended on January 31, 2004. In addition to
meetings of the full Board, directors also attended meetings of Board
committees. During fiscal 2002,2003, the Board had standing audit, compensation,
nominating and governance, executive and real estate committees. In addition, in February 2003, the Board designated a nominating and corporate governance committee, which will meet for the first time in fiscal 2003. During fiscal
2002,2003, all of the directors attended at least 75% of the meetings of the Board
and those Committeescommittees on which he or she served during his or her tenure on the
Board.Board, except for Frank J. Belatti, who attended 75% of Board meetings but only
67% of all meetings of the Board and the committees on which he served. The
Board acted by unanimous written consent on two (2)five (5) occasions during fiscal
2002.
6
Board2003. Galyan's does not have a formal policy with respect to attendance of
directors at annual shareholder meetings, but the Nominating and Governance
Committee Membership
will undertake to consider such a policy during fiscal 2004. One
director attended last year's annual shareholders meeting.

                       CURRENT BOARD COMMITTEE MEMBERSHIP

M                                           M

Name
Audit
committee
Compensation
committee
Executive
committee
Nominating and
corporate
governance
committee
Real estate
committee

                                                                                            NOMINATING AND
                              AUDIT              COMPENSATION           EXECUTIVE             GOVERNANCE            REAL ESTATE
         NAME                COMMITTEE             COMMITTEE             COMMITTEE             COMMITTEE             COMMITTEE
         ---------------------------------------------------------------------------------------------------------------------
Byron E. Allumbaugh
 ........     M
C

- ------------------------------------------------------------------------------------------------------------------------------
Frank J. Belatti
 ...........                           M

- ------------------------------------------------------------------------------------------------------------------------------
Stuart B. Burgdoerfer
 ......                                                                       M

- ------------------------------------------------------------------------------------------------------------------------------
Timothy J. Faber
 ...........                           M
Robert B. Mang

- ------------------------------------------------------------------------------------------------------------------------------
Michael Goldstein ..........     C
- ------------------------------------------------------------------------------------------------------------------------------
Edwin J. Holman ............                                                 M
M

- ------------------------------------------------------------------------------------------------------------------------------
Norman S. Matthews
 .........                           C
M
M
                     C                                           C
- ------------------------------------------------------------------------------------------------------------------------------
George R. Mrkonic, Jr
Jr. .....     M

- ------------------------------------------------------------------------------------------------------------------------------
John M. Roth
 ...............                           M
M
Stephanie M. Shern(1)
C

- ------------------------------------------------------------------------------------------------------------------------------
Ronald P. Spogli
 ...........                                                                       M

- ------------------------------------------------------------------------------------------------------------------------------
Peter Starrett
M
M
M
 .............                           M                     — Member.
C — Chair (for committees that have a designated chairperson).
(1)     
Effective as of the Annual Meeting of Shareholders, Ms. Shern will retire as a director and will no longer serve on the audit committee.
Audit Committee


M - Member
C - Chair (for committees that have a designated chairperson)

AUDIT COMMITTEE
         Our Audit Committee currently consists of three independent directors.
Under its currentThe Board of Directors has adopted a revised Audit Committee charter that
complies with Rule 4350(d)(1) of the NASD listing standards, and a copy of the
revised charter is attached as APPENDIX A. Our Audit Committee has the
responsibility and authority set forth in Rule 4350(d)(3) of the NASD listing
standards under the revised charter. Among other things, our Audit Committee
appoints the independent auditors, reviews the results and scope of the audit
and other services provided by our independent auditors, approves professional
services to be provided by the independent public accountants, reviews and
evaluates our audit and control functions, reviews the independence of the
independent public accountants, considers the range of audit and non-audit fees
and reviews the adequacy of our internal accounting controls. Our Board of
Directors has determined that it has at least one "audit committee financial
expert" serving on the Audit Committee, Michael Goldstein, and that Mr.
Goldstein is an "independent director" as defined in the NASD listing standards.
Our Audit Committee met on ten (10)seventeen (17) occasions during fiscal 2002.
Compensation Committee
2003.

COMPENSATION COMMITTEE
         Our Compensation Committee makes all recommendations to the Board
regarding our equity compensation plans and salaries and incentive compensation
for our executive officers. Our Compensation Committee met on three (3)two (2) occasions
during fiscal 2002.
Executive Committee
2003.


                                        8
                                     


EXECUTIVE COMMITTEE
         Our Executive Committee makes decisions regarding the selection of new
store sites and other store related real estate matters at any time, in the
judgment of the members of our Real Estate Committee, it is necessary or
appropriate to make a decision based on recommendations of our Real Estate
Committee prior to the next scheduled meeting of the Board. Our Executive
Committee did not meet inmet on one (1) occasion during fiscal 2002.
Real Estate Committee
2003. Effective March 1, 2004,
Mr. Holman became a member of this committee and Mr. Mang resigned from the
committee.

REAL ESTATE COMMITTEE
         Our Real Estate Committee reviews the proposals and analysis prepared
by our management team, including Mr. MangHolman and Mr. Zoba, and makes
recommendations to the Board or our Executive Committee, as appropriate under
the circumstances, for the selection of new store sites and other store related
real estate matters. Our Real Estate Committee met on eleven (11)nine (9) occasions during
fiscal 2002.
7
Nominating2003. Effective March 1, 2004, Mr. Holman became a member of this
committee and Corporate Governance Committee
Mr. Mang resigned from the committee.

NOMINATING AND GOVERNANCE COMMITTEE
         Our Nominating and Corporate Governance Committee identifies individuals
qualified to become Board members, and recommends that the Board nominate such
individuals for election to the Board at the next annual meeting of
shareholders. This committee also develops and reviews Galyan’sGalyan's corporate
governance guidelines and makes recommendations to the Board relating to the
guidelines. ThisThe committee was formed in February 2003 and did not make recommendations with respect to the nomineesbelieves that candidates for director coveredshould meet
certain minimum qualifications, including (1) being of the highest ethical
character and sharing the values of Galyan's as reflected in our Ethics Policy,
(2) having reputations, both personal and professional, consistent with the
image and reputation of Galyan's, (3) being highly accomplished in their
respective field, with superior credentials and recognition and (4) having
relevant expertise and experience. The committee retains the right to modify
these minimum qualifications from time to time. Shareholders may provide the
committee information on director candidates for consideration by this proxy statement. This committee
will consider nominees for directors that are recommended by shareholders. Any shareholder wishing to proposewriting a nominee should submit a recommendation in writingletter to our Corporate Secretary at our principal executive
office, 2437 East Main Street,One Galyans Parkway, Plainfield, Indiana 46168; indicating46168 containing the nominee’sfollowing
information: the prospective candidate's name, qualifications, age, relevant
experience, and other relevant biographical information and providing documentation of such nominee’sdirector candidate's consent to serve as a director.
Director Compensation Arrangements
 The
mailing envelope must contain a clear notation indicating that the enclosed
letter is a "Stockholder-Board Communication" or "Stockholder-Director
Communication." All such letters must identify the author as a stockholder and
clearly state that the intended recipients are all members of the Nominating and
Governance Committee. All such communications received by the Corporate
Secretary will be delivered to the members of the Nominating and Governance
Committee. A current copy of the Galyan's Nominating and Governance Committee
Charter is available on our website at WWW.GALYANS.COM in the Investors section,
and is also attached as APPENDIX B.

CODE OF ETHICS
         Galyan's has a code of ethics, the Ethics Policy, which applies to all
employees, officers (including executive officers) and directors. The Ethics
Policy is posted on our website at WWW.GALYANS.COM in the Investors section, and
is attached as APPENDIX C.

DIRECTOR COMPENSATION ARRANGEMENTS

         Each of our directors is eligible for reimbursement for reasonable
travel expenses incurred in attending meetings.

         Michael Goldstein joined the Board in May 2003 and is the Chair of our
Audit Committee. Mr. Goldstein receives an annual cash retainer of $25,000 and
Byron E. Allumbaugh, Frank J. Belatti, and George R. Mrkonic, Jr. and Stephanie M. Shern also receiveeach receives
an annual cash retainer of $10,000,$20,000. Each of these directors also receives a fee
for each Board meeting attended of $2,500


                                        9
                                     


($1,250 for attending by phone), and a fee for each committee meeting not
otherwise held on a day of a Board meeting of $1,000 ($500 for attending by
phone). In addition, each of these four directors,Messrs. Allumbaugh, Belatti and Mrkonic, Jr., upon joining
the Board in September 2000,2001, each received a grant of 10,000 options. Mr.
Goldstein, upon joining the Board in May 2003, also received a grant of 10,000
options. Each of these directors will receive an annual grant of 5,000 options,
whichwith the same vesting conditions. Norman S. Matthews joined the Board in 1999
and is Chairman of the Board, and the Chairman of the Compensation, Executive
and Real Estate Committees. Mr. Matthews receives an annual cash retainer of
$100,000 and no separate fees for meeting attendance. Mr. Matthews receives an
annual grant of 15,000 options, and Galyan's made the first such grant in May
2002. All options granted to members of our Board of Directors have a maximum
term of seven years and vest in equal installments over a three-year period so
long as the directorhe continues to serve. Each of these directors will receiveserve as a grant of 5,000 options, with the same vesting conditions, on each anniversary of his or her appointment or election to service on the Board. We anticipate that Michael Goldstein, a director nominee, will receive a substantially comparable compensation arrangement, if elected.
director.

         In addition, we havehad consulting arrangements with Mr. Matthews and Mr.
Starrett during the last fiscal year. The consulting arrangement with Mr.
Starrett.Matthews terminated in May 2003. See “Compensation"Compensation Committee Interlocks and
Insider Participation”Participation" below for descriptionsa description of these arrangements.
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
Board of Directors


BOARD OF DIRECTORS

         At the Annual Meeting, we will elect twelve (12) directors. The
nominees proposed for election by the Board of Directors are Robert B. Mang,Edwin J. Holman,
Norman S. Matthews, Byron E. Allumbaugh, Frank J. Belatti, Stuart B.
Burgdoerfer, Timothy J. Faber, Michael Goldstein, Todd W. Halloran, George R.
Mrkonic, Jr., John M. Roth, Ronald P. Spogli and Peter Starrett. Robert Mang,
who currently is a member of the Board, has agreed to resign from the Board on
or before May 14, 2004, and will not stand for re-election. Each director will
serve until the annual meeting of shareholders in 20042005 or until his or her
successor is elected and qualified. Stephanie M. Shern, who currently is a member of the Board, has chosen not to stand for re-election. Ms. Shern will hold office as a member of the Board until the election of her successor at the Annual Meeting.
 Each nominee has indicated his or her
willingness to serve if elected, but if any nominee should become unable to
serve, we will vote the proxies solicited hereby for the election of such other
person as our directors shall select.
Information about our Nominees and Continuing Directors
Robert B. Mang,

INFORMATION ABOUT OUR NOMINEES AND CONTINUING DIRECTORS

         EDWIN J. HOLMAN, 57, has served as our Chief Executive Officer and Chairman of the Companysince
March 2004 and as a director since October 2000.September 2003, when he joined the Company as
President and Chief Operating Officer. Mr. Holman served as President and Chief
Operating Officer of Bloomingdale's, Inc., a subsidiary of Federated, Inc., from
July 2000 until August 2003. From August 1997 to January 1999 until July 2000, Mr. MangHolman
served as President and Chief Operating Officer of the Rich's, Lazarus and
Goldsmiths division of Federated, Inc. From January 1996 until January 1999, he
was Chairman and Chief Executive Officer of Monet Group,Petrie Retail, Inc., a designer and marketer of branded fashion jewelry sold through department stores. From January 1996 to December 1996, Mr. Mang served as Vice Chairman of Duty Free Shoppers. Monet Group, Inc. filed for bankruptcy protection in May 2000.
Norman

         NORMAN S. Matthews, 70,MATTHEWS, 71, has served as a director and has been
designated as the (non-executive) Chairman of our Board of Directors since
August 1999. Mr. Matthews has been an independent retail consultant for more
than fifteen years. From 1982 to 1988, Mr. Matthews served as Vice Chairman and
then President of Federated Department Stores, Inc. Mr. Matthews also serves as
a member of the board of directors of Henry Schein, Inc., Finlay Enterprises,
Inc., Progressive Corporation, Sunoco, Inc. and Toys “R”"R" Us, Inc.
8
Byron

         BYRON E. Allumbaugh, 71,ALLUMBAUGH, 72, has served as a director since September 2001.
Mr. Allumbaugh served as Chairman and Chief Executive Officer of Ralphs
Supermarkets, a California based chain, from 1976 to 1995, and as Chairman from
1995 until February 1997. Since February 1997, he has been a self-employed
business consultant. Mr. Allumbaugh also serves as a member of the board of
directors of CKE Restaurants, Inc., El Paso Corporation, Penn Traffic Company and The Pantry, Inc.
Frank


                                       10
                                     


         FRANK J. Belatti, 55,BELATTI, 56, has served as a director since September 2001.
Mr. Belatti has served as Chairman and Chief Executive Officer of AFC
Enterprises, Inc. in Atlanta, Georgia since 1992. Mr. Belatti also serves as a
member of the board of directors of Radio Shack Corporation and AFC Enterprises,
Inc.
Stuart

         STUART B. Burgdoerfer, 40,BURGDOERFER, 41, has served as a director since May 2001. Mr.
Burgdoerfer joined Limited Brands in September 1998 and served as Vice President
and Corporate Controller from November 2000 until August 2002 and as a Senior
Vice President and Corporate Controller since August 2002. From September 1999
to November 2000, he was Vice President and Chief Financial Officer of White
Barn Candle Company, a division of Limited Brands. From September 1998 to
September 1999, he served as Vice President-Financial Planning of Limited
Brands.

         From September 1996 to September 1998, Mr. Burgdoerfer served in strategic planning and financial management capacities at Pizza Hut, Inc.
TimothyTIMOTHY J. Faber, 41,FABER, 42, has served as a director since November 2000. Mr.
Faber joined Limited Brands in January 2000 and serves as its Vice President
Treasury/Mergers and Acquisitions. From September 1996 to January 2000, Mr.
Faber was employed by the General Electric Company as Managing Director of the
Capital Markets Services division of GE Capital.
Michael Goldstein, 61, is

         MICHAEL GOLDSTEIN, 62, has served as a nominee for director.director since May 2003. Mr.
Goldstein has been the Chairman of the Toys “R”"R" Us Children’sChildren's Fund, Inc. since
2001. Mr. Goldstein was the Chairman of the Board of Toys “R”"R" Us, Inc. from 1998
to 2001, and Chief Executive Officer from 1994 to 1997. Mr. Goldstein also
serves as a member of the board of directors of Toys “R” Us, Inc., Finlay Enterprises, Inc., United
Retail Group, Inc., 4 Kids Entertainment, Inc. and Columbia House Company.
ToddMedco Health Solutions, Inc.

         TODD W. Halloran, 41,HALLORAN, 42, has served as a director since August 1999. Mr.
Halloran joined Freeman Spogli & Co. in 1995 and became a Principal in 1998. Mr.
Halloran also serves as a member of the board of directors of The Pantry, Inc.
George

         GEORGE R. Mrkonic, Jr.MRKONIC, JR.,50, 51, has served as a director since September
2001. Mr. Mrkonic served as Vice Chairman of Borders Group, Inc. from December
1994 to January 2002. From November 1994 until January 1997, he served as Vice
Chairman and President of Borders Group, Inc. He also serves as a member of the
board of directors of Borders Group, Inc., Champion Enterprises, Inc., Guitar Center, Inc., Nashua
Corporation, and Syntel, Inc.
John, and Brinker International, Inc.

         JOHN M. Roth, 44,ROTH, 45, has served as a director since August 1999. Mr. Roth
joined Freeman Spogli & Co. in March 1988 and became a Principal in 1993. Mr.
Roth also serves as a member of the board of directors of Advance Auto Parts,
Inc., Asbury Automotive Group, Inc. and AFC Enterprises, Inc.
Ronald

         RONALD P. Spogli, 55,SPOGLI, 56, has served as a director since August 1999. Mr.
Spogli is a Principal of Freeman Spogli & Co., which he co-founded in 1983. Mr.
Spogli also serves as a member of the board of directors of Hudson Respiratory
Care, Inc., Century Maintenance Supply, Inc., and AFC Enterprises, Inc.

         and Advance Auto Parts, Inc.
Peter Starrett, 55,PETER STARRETT, 56, has served as a director since August 1999. In
August 1998, Mr. Starrett founded Peter Starrett Associates, a retail advisory
firm. From 1990 to 1998, Mr. Starrett served as the President of Warner Bros.
Studio Stores Worldwide. Mr. Starrett also serves as a member of the board of
directors of Guitar Center, Inc., Pacific Sunwear, Inc., The Pantry, Inc. and
AFC Enterprises, Inc.
The Board of Directors recommends a vote FOR the election of the
directors listed above. We will vote proxies received by us in favor of the
above nominees unless a contrary choice is indicated.
9



                                       11
                                     
Information Regarding Certain Directorships and Voting Arrangements



INFORMATION REGARDING CERTAIN DIRECTORSHIPS AND VOTING ARRANGEMENTS

         We are party to a stockholders agreement with FS Equity Partners IV, L.P.,Freeman Spogli, Limited
Brands, Inc. (formerly known as The Limited, Inc.), and G Trademark Inc. (a wholly-owned subsidiary of Limited
Brands) and Benchmark Capital Partners IV, L.P., under which Freeman Spogli, Limited Brands, and G Trademark and Benchmark Capital have agreed
to vote all of their shares in the election of directors in favor of the
following persons: (a) four Board nominees designated by Freeman Spogli, (b) two
Board nominees designated by Limited Brands, (c) our Chief Executive Officer in
office at the time of any election of directors, which currently is Robert B. Mang,Edwin S.
Holman, (d) Norman S. Matthews, who is our current Chairman of the Board, and
(e) one or more additional nominees upon whom Freeman Spogli and Limited Brands
shall agree. If, at the time of any election of directors (or appointment of
directors in the event of a vacancy or an increase in the size of the Board),
Freeman Spogli and Limited Brands are unable to agree on any such additional
nominees, our stockholders agreement provides that our Board in existence at
that time will select the additional nominees. The number of Board nominees that
Freeman Spogli and Limited Brands are entitled to nominate under the agreement
decreases if the number of shares held by such party falls below certain
thresholds set forth in the stockholders agreement. Under the stockholders
agreement, the parties have agreed that we will have a Board consisting of no
more than 13 members. In addition, until one year after the date on which
persons other than Freeman Spogli and Limited Brands and their respective
affiliates own 20% or more of our shares, Limited Brands and Benchmark Capital havehas agreed to vote
against any combination of our company unless Freeman Spogli consents to the
combination.


         Under the terms of the stockholders agreement, the four designees of
FS Equity Partners IV, L.P.Freeman Spogli are Todd W. Halloran, John M. Roth, Ronald P. Spogli and Peter
Starrett and the two designees of Limited Brands are Stuart B. Burgdoerfer and
Timothy J. Faber.
 Benchmark Capital, previously party to this stockholders
agreement, distributed its shares in the Company to its limited partners in 2003
and, as a result, is no longer bound by the stockholders agreement.

         There are no family relationships among any of our directors or
executive officers.


                                 PROPOSAL NO. 2:
                       APPROVAL OF STOCK OPTION AGREEMENT

         On August 29, 2003, Galyan's entered into an amended employment
agreement with Edwin J. Holman, which is currently in effect, in connection with
his agreement to become Galyan's President and Chief Operating Officer. On March
1, 2004, in connection with his agreement to become our Chief Executive Officer,
Galyan's granted to Mr. Holman a nonqualified stock option to purchase 100,000
shares of Galyan's common stock, which was evidenced by a stock option agreement
(the "Option Agreement"). This stock option was not granted under the 1999 Stock
Plan and, instead, was granted subject to shareholder approval at the Annual
Meeting. This stock option will not be effective if the shareholders do not
approve it.

         The full text of the Option Agreement is attached as APPENDIX D. The
material terms of the Option Agreement are described below, but such description
is qualified in its entirety by reference to the text of the Option Agreement,
attached as APPENDIX D.

         The Board of Directors recommends a vote FOR the approval of the Option
Agreement.


                                       12
                                     

VOTE REQUIRED

         Approval of the Option Agreement requires that the votes cast for
approval of the Option Agreement exceed those cast against approval of the
Option Agreement. Only votes cast for or against approval of the Option
Agreement will be counted. Abstentions and broker non-votes will not change the
number of votes cast for or against the proposal.

SUMMARY OF THE OPTION AGREEMENT

         SHARES SUBJECT TO THE OPTION AGREEMENT. The aggregate number of shares
of Galyan's common stock that may be issued pursuant to the nonqualified stock
option is 100,000 shares, subject to adjustment for reorganizations,
recapitalizations, stock splits, etc as provided below. The per share exercise
price of the option is $8.74, which was 100% of the fair market value of
Galyan's common stock on the date of grant. The option is not intended to
qualify as an incentive stock option under Section 422 of the Internal Revenue
Code.

         TERM OF AGREEMENT; CONSIDERATION FOR SHARES. The option and Mr.
Holman's right to exercise the option will terminate on March 1, 2011, unless
terminated earlier pursuant to the terms of the Option Agreement. To the extent
that the option has become vested and exercisable, Mr. Holman may exercise the
vested portion of the option by delivering to Galyan's a written notice of
exercise and full payment of the aggregate exercise price and any withholding
taxes in cash, by check or in such other form of lawful consideration as the
Board may approve from time to time, including without limitation, by delivering
previously-owned shares of Galyan's common stock.

         VESTING. Subject to earlier termination of the option or acceleration
of vesting as provided in the Option Agreement, the option will vest and become
exercisable as to one-third of the total number of shares subject to the option
on each of the first three anniversaries of the date of grant, but only if Mr.
Holman remains employed by Galyan's on each such date.

         EFFECT OF A TERMINATION OF EMPLOYMENT. If Galyan's terminates Mr.
Holman's employment for "Cause" or Mr. Holman resigns for other than "Good
Reason" or "Special Resignation" (each as defined in Mr. Holman's employment
agreement), his right to exercise the option, to the extent unexercised, will
terminate immediately upon his termination of employment.

         If Mr. Holman's employment terminates during the term of his employment
agreement by Galyan's other than for Cause, upon his death or Disability (as
defined in the employment agreement), or if he terminates employment for Good
Reason or Special Resignation then he (or his estate in case of his death) may
exercise the option, to the extent then vested and exercisable, at any time
before the earlier of (1) the first anniversary of his termination of employment
or (2) the date on which his right to exercise the option would have terminated
if he had not terminated employment.

         If Mr. Holman's employment terminates for any other reason other than
set forth in the preceding two paragraphs, he (or his estate, in case of his
death) may exercise the option, to the extent then vested and exercisable at any
time before the earlier of (1) 90 days after his termination of employment date
or (2) the date on which his right to exercise the options would have terminated
if he had not terminated employment.

         Termination of Mr. Holman's employment will not accelerate the vesting
of all or any part of the option.


                                       13
                                     


         EFFECT OF A CHANGE IN CONTROL. Notwithstanding the foregoing, in the
event of a "Change in Control" (as defined in Mr. Holman's employment
agreement), the option, to the extent unvested on such date, shall become fully
vested and exercisable. A "Change in Control" generally includes (subject to
certain exceptions and as more specifically defined in the employment
agreement):

         o  an acquisition by any person or group other than a permitted
            shareholder of the beneficial ownership of more than the greater of
            (1) 30% of Galyan's then outstanding common stock and (2) the common
            stock held by permitted shareholders and the incumbent directors
            cease to constitute more than 50% of the members of the Board of
            Directors;

         o  the consummation of a merger or consolidation or sale of all or
            substantially all of Galyan's assets, in any case involving more
            than a 40% change in ownership; or

         o  approval by the Board of Directors or the shareholders of a
            liquidation or dissolution of Galyan's.

         ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, MERGER OR SALE OF ASSETS.
Upon the occurrence of a dissolution, liquidation or sale of all or
substantially all our assets, or certain reorganizations or mergers in which
Galyan's does not survive or Galyan's does survive and shareholders of Galyan's
have the opportunity to receive cash or securities for their shares of Galyan's,
or any acquisition by a person or group owning more than fifty percent of
Galyan's then outstanding shares and no provision is made for the substitution,
assumption, settlement or other continuation of the option, the option, to the
extent then unvested, will become fully vested and exercisable and Mr. Holman
will have 10 days to exercise his vested option before the option terminates on
the consummation date of the triggering event. Upon other recapitalizations or
reorganizations, such as reclassification, stock split, etc., the Board will
make appropriate adjustments, if any, to the number, kind or exercise price of
shares subject to the option to the extent the option is then outstanding.

         TRANSFERABILITY. Generally speaking, the option may not be assigned or
transferred except by will or by the laws of descent and distribution, and is
generally only exercisable by Mr. Holman (or if he has suffered a disability, by
his legal representative).

         AMENDMENT AND TERMINATION OF THE OPTION AGREEMENT. The Option Agreement
may be amended by a written agreement executed by both of the parties. Galyan's
may unilaterally waive any provision of the Option Agreement to the extent that
such a waiver does not adversely affect Mr. Holman's rights under the Option
Agreement. Shareholder approval for any amendment will be required only to the
extent required under applicable law, including Code Section 162(m), or to the
extent otherwise deemed necessary or advisable by the Board.

         FEDERAL INCOME TAX CONSEQUENCES. Galyan's is generally entitled to
deduct, and Mr. Holman will recognize taxable income in, an amount equal to the
difference between the option exercise price and the fair market value of the
shares at the time of exercise. If the vesting of the option is accelerated in
connection with a change in control (as this term is used under the Internal
Revenue Code), we may not be permitted to deduct the portion of the compensation
attributable to the acceleration ("parachute payments") if it exceeds certain
threshold limits under the Internal Revenue Code (and certain related excise
taxes may be triggered). Furthermore, if the compensation attributable to awards
is not "performance-based" within the meaning of Section 162(m) of the Internal
Revenue Code, we may not be permitted to deduct the aggregate non
performance-based compensation in excess of $1,000,000 in certain circumstances.

SECURITIES UNDERLYING OPTION. ON APRIL 1, 2004, THE CLOSING PRICE OF A SHARE OF
GALYAN'S COMMON STOCK WAS $9.99. IF THE OPTION AGREEMENT IS APPROVED BY
SHAREHOLDERS, GALYAN'S PLANS TO REGISTER THE 100,000 SHARES OF COMMON STOCK
SUBJECT TO THE OPTION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


                                       14
                                     

                                 PROPOSAL NO. 3:
                     APPROVAL OF RESTRICTED STOCK AGREEMENT

         On August 29, 2003, Galyan's entered into an amended employment
agreement with Edwin J. Holman, which is currently in effect, in connection with
his agreement to become Galyan's President and Chief Operating Officer. On March
1, 2004, in connection with his agreement to become our Chief Executive Officer,
Galyan's granted to Mr. Holman an award of 50,000 shares of Galyan's common
stock, subject to the restrictions and conditions set forth in a restricted
stock agreement (the "Restricted Stock Agreement"), subject to shareholder
approval at the Annual Meeting. This award will not be effective if the
shareholders do not approve it.

         The full text of the Restricted Stock Agreement is attached to this
Proxy Statement as APPENDIX E. The material terms of the Restricted Stock
Agreement are described below, but such description is qualified in its entirety
by reference to the text of the Restricted Stock Agreement, attached as APPENDIX
E.

         The Board of Directors recommends a vote FOR the approval of the
Restricted Stock Agreement.

VOTE REQUIRED

         Approval of the Restricted Stock Agreement requires that the votes cast
for approval of the Restricted Stock Agreement exceed those cast against
approval of the Restricted Stock Agreement. Only votes cast for or against
approval of the Restricted Stock Agreement will be counted. Abstentions and
broker non-votes will not change the number of votes cast for or against the
proposal.

SUMMARY OF THE RESTRICTED STOCK AGREEMENT

         SHARES SUBJECT TO THE RESTRICTED STOCK AGREEMENT; CONSIDERATION FOR
SHARES. The aggregate number of shares of Galyan's common stock subject to the
restricted stock award is 50,000 shares. The consideration for the shares
delivered consists of services rendered and to be rendered by Mr. Holman to
Galyan's in accordance with the terms of his employment.

         VESTING; EFFECT OF A TERMINATION OF EMPLOYMENT. Subject to any
acceleration of vesting as provided in the Restricted Stock Agreement, the
shares subject to the restricted stock award will vest and become
non-forfeitable as to one-third of the total number of shares on each of the
first three anniversaries of the date of grant, provided that Mr. Holman remains
employed by Galyan's on each such date. Except as provided in the next sentence,
the restricted shares, to the extent unvested on a termination of Mr. Holman's
employment, shall immediately be forfeited on the termination date without
payment of consideration. However, if Mr. Holman's employment is terminated
during the term of his employment agreement by Galyan's other than for "Cause,"
upon his death or "Disability," or if he terminates employment with Galyan's for
"Good Reason" or "Special Resignation" (each as defined in Mr. Holman's
employment agreement) then the restricted shares, to the extent then unvested,
shall immediately vest and become non-forfeitable.

         EFFECT OF A CHANGE IN CONTROL. In the event of a "Change in Control"
(as defined in Mr. Holman's employment agreement), the restricted shares, to the
extent unvested on such date, shall become fully vested and non-forfeitable. A
"Change in Control" generally includes (subject to certain exceptions and as
more specifically defined in the employment agreement):


                                       15
                                     


         o  an acquisition by any person or group other than a permitted
            shareholder of the beneficial ownership of more than the greater of
            (1) 30% of Galyan's then outstanding common stock and (2) the common
            stock held by permitted shareholders and the incumbent directors
            cease to constitute more than 50% of the members of the Board of
            Directors;

         o  the consummation of a merger or consolidation or sale of all or
            substantially all of Galyan's assets, in any case involving more
            than a 40% change in ownership; or

         o  approval by the Board of Directors or the shareholders of a
            liquidation or dissolution of Galyan's.

         TRANSFERABILITY. Prior to the date that the restricted shares become
vested and non-forfeitable, Mr. Holman may not sell, transfer, pledge,
hypothecate or otherwise dispose of the restricted shares.

         AMENDMENT OF THE RESTRICTED STOCK AGREEMENT. The Restricted Stock
Agreement may be amended by a written agreement executed by both of the parties.
Shareholder approval for any amendment will be required only to the extent
required under applicable law.

         FEDERAL INCOME TAX CONSEQUENCES. Galyan's is generally entitled to
deduct, and Mr. Holman will recognize taxable income in, an amount equal to the
fair market value of the common stock on the date the restricted shares vest and
become non-forfeitable.

         If the vesting of the restricted shares is accelerated under the
Restricted Stock Agreement in connection with a change in control (as this term
is used under the Internal Revenue Code), we may not be permitted to deduct the
portion of the compensation attributable to the acceleration ("parachute
payments") if it exceeds certain threshold limits under the Internal Revenue
Code (and certain related excise taxes may be triggered). Furthermore, because
the compensation attributable to the restricted stock award is not
"performance-based" within the meaning of Section 162(m) of the Internal Revenue
Code, we will not be permitted to deduct the aggregate non performance-based
compensation in excess of $1,000,000 in certain circumstances.

SECURITIES SUBJECT TO RESTRICTED STOCK AWARD. ON APRIL 1, 2004, THE CLOSING
PRICE OF A SHARE OF GALYAN'S COMMON STOCK WAS $9.99. IF THE RESTRICTED STOCK
AGREEMENT IS APPROVED BY SHAREHOLDERS, GALYAN'S PLANS TO REGISTER THE 50,000
RESTRICTED SHARES OF COMMON STOCK UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


                                 PROPOSAL NO. 4:
            APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE GALYAN'S
            TRADING COMPANY, INC. 1999 STOCK OPTION PLAN, AS AMENDED

         On October 15, 1999, the Board of Directors adopted the Galyan's
Trading Company, Inc. 1999 Stock Option Plan (as amended, the "1999 Stock
Plan"). The shareholders subsequently approved amendments to the 1999 Stock Plan
on May 1, 2001 and on May 29, 2002. On April 6, 2004, the Board of Directors
approved an amended and restated version of the 1999 Stock Plan, which reflects
the amendments to the 1999 Stock Plan described below, subject to shareholder
approval at the Annual Meeting.


                                       16
                                     


         The full text of the 1999 Stock Plan, as amended and restated, is
attached to this Proxy Statement as APPENDIX F. The principal features of the
1999 Stock Plan, including an explanation of material changes contemplated by
the proposed amendments, are described below, but such description is qualified
in its entirety by reference to the text of the 1999 Stock Plan, as amended and
restated, attached as APPENDIX F. Except as otherwise described below in the
explanation of the proposed amendments, none of the other existing provisions of
the 1999 Stock Plan have been materially changed. In particular, the amendments
are not expected to increase the aggregate number of Galyan's shares available
for award grant purposes under the plan. However, to comply with proposed tax
regulations relating to incentive stock options, the amendments modify the
trigger date for the scheduled increase in available shares under the plan on
May 29, 2004, so that the increase in the number of available shares will be
520,871, which is 3% of the shares of Galyan's common stock outstanding on March
29, 2004, rather than 3% of the shares of the Galyan's common stock outstanding
on May 29, 2004, as provided in the current plan.

         The Board of Directors recommends a vote FOR the approval of the
amendment and restatement of the Galyan's Trading Company, Inc. 1999 Stock
Option Plan.

VOTE REQUIRED

         Approval of the amendment and restatement of the 1999 Stock Plan
requires that the votes cast for approval of the amendment and restatement
exceed those cast against approval of the amendments. Only votes cast for or
against approval of the amendment and restatement will be counted. Abstentions
and broker non-votes will not change the number of votes cast for or against the
proposal.

PROPOSED PLAN AMENDMENTS

         The 1999 Stock Plan has principally been amended to authorize the grant
of restricted stock awards and stock appreciation rights (in addition to stock
options) to provide for the deferred payment of awards and to increase the
number of options that may be granted to any individual in a calendar year. The
Board of Directors believes that the flexibility to grant restricted stock and
stock appreciation rights under the 1999 Stock Plan will provide Galyan's with
greater flexibility to structure future incentives. If the 1999 Stock Plan
proposal is not approved by shareholders, no awards of restricted stock or stock
appreciation rights will be made under the 1999 Stock Plan and the current stock
option features of the 1999 Stock Plan will remain in effect (without giving
effect to the amendments approved by the Board of Directors and currently
proposed for consideration by the shareholders).

SUMMARY OF THE 1999 STOCK PLAN

         PURPOSE. The purpose of the 1999 Stock Plan is to further the growth,
development and financial success of Galyan's by providing stock-based
incentives to eligible employees, directors, officers or consultants of Galyan's
and its subsidiaries that align the participants' interests with those of
Galyan's shareholders and to assist Galyan's in its efforts to attract and
retain quality key employees and service providers.

         ADMINISTRATION.  The 1999 Stock Plan is administered by the Board. The
Board may elect to delegate some or all of the administration to the
Compensation Committee, which consists of two or more non-employee directors,
each of whom meet certain standards of disinterestedness.  The appropriate
acting body is referred to as the "Administrator."  The Administrator has broad
authority under the 1999 Stock Plan, which generally includes the authority to
grant awards (including specifying the terms of the awards), determine
eligibility, accelerate vesting or exercise periods, establish, amend and
rescind rules and interpret and make all other determinations deemed necessary
or advisable for the administration of the 1999 Stock Plan.


                                       17
                                     

The 1999 Stock Plan will not limit the authority of the Board or the
Compensation Committee to grant awards or authorize any other compensation, with
or without reference to Galyan's common stock, under any other plan or
authority.

         ELIGIBILITY. Awards under the 1999 Stock Plan may be granted to any key
employee, director, officer or consultant of Galyan's or any of its subsidiaries
as determined from time to time by the Administrator. As of March 22, 2004,
approximately 5,976 of Galyan's employees and consultants, including all ten
executive officers, and all 11 of Galyan's non-employee directors were
considered eligible to be granted awards under the 1999 Stock Plan.

         SHARES SUBJECT TO THE 1999 STOCK PLAN. The aggregate number of shares
of Galyan's common stock that may be issued pursuant to all awards under the
1999 Stock Plan is 3,024,757 shares, plus an additional 520,871 shares of
Galyan's common stock, which will become available under the plan on May 29,
2004. Various additional share limits are imposed. A maximum of:

         o 1,000,000 shares may be issued pursuant to incentive stock options;

         o  250,000 shares (increased from 100,000 in the current plan) may be
            subject to all awards granted to any one individual in any calendar
            year; and

         o  100,000 shares may be issued pursuant to restricted stock awards to
            any one individual in any calendar year.

         Each of the foregoing limits is further subject to adjustments for
reorganizations, recapitalizations, stock splits, etc. In addition, any shares
subject to awards that are not exercised, that fail to vest, are forfeited or
that expire or are terminated and any shares surrendered as payment for an
option will again be available for regrant and award purposes under the 1999
Stock Plan.

         TYPES OF AWARDS. The 1999 Stock Plan authorizes the grant of stock
options (both incentive stock options and nonqualified stock options), stock
appreciation rights ("SARs") and restricted stock awards. Awards may be granted
under the 1999 Stock Plan pursuant to another incentive program that
incorporates the terms and conditions of the 1999 Stock Plan by reference, may
be granted singly or in tandem with other awards and may be granted in
substitution for other awards granted by Galyan's, whether or not such other
awards were granted under the 1999 Stock Plan.

         The Administrator has discretion to establish the vesting period of
awards, and may grant awards that are fully vested and exercisable at grant.
Subject to earlier termination as set forth in the 1999 Stock Plan or an award
agreement, each award granted under the 1999 Stock Plan will terminate no later
than seven years after the date of grant. If a grantee pays part or all of the
exercise price and/or taxes associated with an award by transferring or
surrendering shares of stock to Galyan's, the Administrator may, in its
discretion, grant a new award to replace the shares of stock transferred and/or
surrendered.

         TERM OF PLAN; CONSIDERATION FOR SHARES. Awards may be granted under the
1999 Stock Plan until October 15, 2009. The 1999 Stock Plan permits the
participants to pay the exercise price of an option or the cash purchase price
(if any) of any shares in cash, by check or in such other form of lawful
consideration as the Administrator may approve from time to time, including
without limitation, by delivering previously-owned shares of Galyan's common
stock. Shares may also be issued solely for services.


                                       18
                                     


         STOCK OPTIONS. A stock option is the right to purchase shares of our
common stock at a future date at a specified price. The price at which the
common stock may be purchased is referred to as the "exercise price" of the
option. An option may either be an incentive stock option or a nonqualified
stock option. The exercise price will be determined by the Administrator, but in
the case of an incentive stock option may not be less than the fair market value
of a share of our common stock (110% in the case of a 10% owner of Galyan's
stock) on the date the option is granted.

         Incentive stock options are also subject to more restrictive terms and
are limited in amount by the 1999 Stock Plan and the U.S. Internal Revenue Code.
The 1999 Stock Plan limits the aggregate fair market value of shares with
respect to which incentive stock options are exercisable for the first time by
any optionee in any calendar year under our plans to $100,000 per year. In
addition, incentive stock options granted under the plan are subject the
additional terms and conditions required for the options to qualify as
"incentive stock options" under Section 422 the Internal Revenue Code. Subject
to earlier termination, incentive stock options shall expire not more than seven
years after the date of grant, and incentive stock options granted to a 10%
shareholder of Galyan's shall expire not more than five years after the date of
grant. Incentive stock option benefits are taxed differently from nonqualified
stock options, as described under "Federal Income Tax Consequences" below. No
incentive stock options have been granted.

         STOCK APPRECIATION RIGHTS. A stock appreciation right is the right to
receive payment in cash or shares of an amount equal to the excess of the fair
market value of a share of Galyan's common stock on the date of exercise of the
stock appreciation right over the base price of the stock appreciation right.
The base price will be established by the Administrator at the time of grant of
the stock appreciation right, but will not be less than the fair market value of
a share of our common stock on the date of grant.

         RESTRICTED STOCK AWARDS. A restricted stock award is an award typically
for a fixed number of shares of Galyan's common stock subject to restrictions.
The Administrator specifies the price, if any, the participant must pay for such
shares and the restrictions (which may include, for example, continued service
only) imposed on such shares.

         DEFERRED PAYMENT. The 1999 Stock Plan authorizes the Administrator to
permit the deferred payment of awards. The Administrator may determine the form
and timing of payment, vesting, and other terms applicable to deferrals.

         TERMINATION OF EMPLOYMENT. The Administrator may establish the effect
of termination of employment or service on the rights and benefits under each
award, and may make distinctions based upon, among others, the cause of
termination and type of award. Unless otherwise expressly provided by the
Administrator, a participant's termination of employment or service shall not
accelerate or otherwise increase the number of shares subject to an award.

         In addition, the Administrator may cancel any unexpired, unpaid or
deferred awards at any time if the participant is not in compliance with all
applicable provisions of the 1999 Stock Plan or with any award agreement or if
the participant, whether or not he or she is currently employed by Galyan's,
engages in any of the following activities without Galyan's prior written
consent: (1) directly or indirectly renders services to or for an organization,
or engages in a business, that is, in the judgment of the Administrator, in
competition with Galyan's or (2) discloses to anyone outside of Galyan's, or
uses for any purpose other than Galyan's business, any confidential or
proprietary information or material relating to Galyan's, whether acquired by
the participant during or after employment with Galyan's.


                                       19
                                     


         ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, MERGER OR SALE OF ASSETS.
Subject to the Administrator's right to accelerate vesting and exercisability of
outstanding awards, upon dissolution, liquidation or sale of all or
substantially all our assets, or certain reorganizations or mergers in which
Galyan's does not survive or Galyan's does survive and shareholders of Galyan's
have the opportunity to receive cash or securities for their shares of Galyan's,
or any acquisition by a person or group owning more than fifty percent of our
then outstanding shares, the 1999 Stock Plan and all outstanding awards will
terminate, subject to any provisions made by the Administrator for the
substitution, assumption, settlement or other continuation of the awards. Upon
other recapitalizations or reorganizations, such as reclassification, stock
split, etc., the Administrator shall make appropriate adjustments, if any, to
the number, kind or exercise price of shares subject to outstanding awards or
remaining available for grant.

         TRANSFERABILITY. Subject to customary exceptions, awards generally may
not be assigned or transferred except by will or by the laws of descent and
distribution, and are generally only exercisable by the participant (or if the
participant has suffered a disability, by his or her legal representative).

         AMENDMENT AND TERMINATION OF THE PLAN. The Board may terminate and the
Administrator may amend the 1999 Stock Plan at any time. Shareholder approval
for any amendment will be required only to the extent required under applicable
law, including Code Section 162(m) and Code Section 422, or to the extent
otherwise deemed necessary or advisable by the Board. Generally speaking, no
amendment may materially adversely affect any award then outstanding without the
written consent of the participant.

FEDERAL INCOME TAX CONSEQUENCES

         The federal income tax consequences of an employee's participation in
the 1999 Stock Plan are complex and subject to change. The following discussion
is only a summary of the general rules applicable to awards granted under the
1999 Stock Plan as of the date hereof. The application of state and local income
taxes and other federal taxes is not discussed. For individuals resident outside
the United States, the tax consequences to the individual and to us are
determined by the applicable tax laws of the foreign jurisdiction.

         With respect to nonqualified stock options, Galyan's is generally
entitled to deduct, and the optionee recognizes taxable income in, an amount
equal to the difference between the option exercise price and the fair market
value of the shares at the time of exercise. With respect to incentive stock
options, we generally are not entitled to a deduction nor does the participant
recognize income at the time of exercise, although the optionee may be subject
to the U.S. federal alternative minimum tax. If incentive stock option shares
are not held for specified qualifying periods, however, the difference between
the fair market value of the shares at the date of exercise (or, if lower, the
sale price) and the cost of such shares is taxed as ordinary income (and we
generally will receive a corresponding deduction) in the year the shares are
sold.

         The current federal income tax consequences of other awards authorized
under the 1999 Stock Plan generally follow certain basic patterns: stock
appreciation rights are taxed and deductible in substantially the same manner as
nonqualified stock options and non-transferable restricted stock subject to a
substantial risk of forfeiture results in income recognition equal to the excess
of the fair market value over the price paid (if any) only at the time the
restrictions lapse (unless the recipient elects to accelerate recognition as of
the date of grant). In each of the foregoing cases, we generally will have a
corresponding deduction at the time the participant recognizes income.


                                       20
                                     


         If the vesting of an award is accelerated under the 1999 Stock Plan in
connection with a change in control (as this term is used under the Internal
Revenue Code), we may not be permitted to deduct the portion of the compensation
attributable to the acceleration ("parachute payments") if it exceeds certain
threshold limits under the Internal Revenue Code (and certain related excise
taxes may be triggered). Furthermore, if the compensation attributable to awards
is not "performance-based" within the meaning of Section 162(m) of the Internal
Revenue Code, we may not be permitted to deduct the aggregate non
performance-based compensation in excess of $1,000,000 in certain circumstances.

         SPECIFIC BENEFITS. Galyan's has not approved any awards under the 1999
Stock Plan that are contingent on shareholder approval of this 1999 Stock Plan
proposal. If the plan amendments reflected in this 1999 Stock Plan proposal had
been in effect in fiscal 2003, we do not expect that our award grants for fiscal
2003 would have been substantially different from those actually granted under
the plan in that year. For information regarding stock options granted to our
named executive officers in fiscal 2003, see the material under the heading
"Executive Compensation" on page 25. For additional information regarding past
option grants under the 1999 Stock Plan, see the "Aggregate Past Grants under
the 1999 Stock Plan" table below. We are not currently considering any specific
additional awards under the 1999 Stock Plan. The number, amount and type of
awards to be received by or allocated to eligible persons in the future under
the 1999 Stock Plan cannot be determined at this time.

SECURITIES UNDERLYING AWARDS. ON APRIL 1, 2004, THE CLOSING PRICE OF A SHARE OF
GALYAN'S COMMON STOCK WAS $9.99. GALYAN'S HAS REGISTERED THE AGGREGATE NUMBER OF
SHARES AVAILABLE FOR ISSUANCE UNDER THE 1999 STOCK PLAN UNDER THE SECURITIES ACT
OF 1933, AS AMENDED.


                                       21
                                     


AGGREGATE PAST GRANTS UNDER THE 1999 STOCK PLAN

         As of April 1, 2004, options covering 2,489,769 shares of our common
stock had been granted (and not cancelled and/or surrendered) under the 1999
Stock Plan. The following table shows information regarding the distribution of
those options among the persons and groups identified below and option exercises
prior to and option holdings as of that date.



                                                         NUMBER OF             NUMBER OF          NUMBER OF SHARES UNDERLYING
                                                      SHARES SUBJECT             SHARES           OPTIONS AS OF APRIL 1, 2004
                                                      TO PAST OPTION          ACQUIRED ON
         NAME AND POSITION                                 GRANTS               EXERCISE         EXERCISABLE        UNEXERCISABLE
        -------------------                          ----------------        -------------      -------------      --------------

  EXECUTIVE GROUP:

     Robert B. Mang ..................................        300,000                --              191,000             109,000
     Former Chief Executive Officer and Chairman
     of the Company1

     Edwin J. Holman .................................        200,000                --                   --             200,000
     Chief Executive Officer (President and
     Chief Operating Officer as of the end of the
     most recent fiscal year)

     C. David Zoba ...................................        176,000                --               80,333              96,667
     Executive Vice President, General Counsel
     and Secretary

     Charles F. Nelson ...............................         44,500             5,833               37,000               1,667
     Former Senior Vice President, Minister
     of Culture2

     Edward S. Wozniak ...............................         91,000                --               47,333              43,667
     Senior Vice President and Chief Financial
     Officer

  TOTAL FOR EXECUTIVE GROUP (12 PERSONS): ............      1,238,100            11,833              495,565             730,702

NON-EXECUTIVE DIRECTOR GROUP: ........................        340,000                --              270,002              69,998

EACH OTHER PERSON WHO RECEIVED OR IS TO RECEIVE 5%
OR MORE OF THE OPTIONS, WARRANTS OR RIGHTS UNDER THE
1999 STOCK OPTION PLAN                                             --                --                   --                  --

ALL EMPLOYEES, INCLUDING ALL CURRENT OFFICERS WHO ARE
NOT EXECUTIVE OFFICERS OR DIRECTORS, AS A GROUP ......        911,668           177,802              327,097             406,769
                                                           ----------           -------           -----------          ------------

  TOTAL                                                     2,489,768           189,635            1,092,664           1,207,469
                                                           ==========           =======           ===========          ============


1    Mr. Mang resigned from these positions on March 1, 2004.
2    Mr. Nelson retired from Galyan's effective January 31, 2004.


                      EQUITY COMPENSATION PLAN INFORMATION

         As of the end of fiscal 2003, we maintained the following compensation
plans under which our equity securities are authorized for issuance: (1) 1999
Stock Option Plan, (2) 1999 Stock Subscription Plan, (3) 2002 Employee Stock
Purchase Plan, (4) a stock option agreement entered into in 2003 with Edwin J.
Holman and (5) a restricted stock agreement entered into in 2003 with Edwin J.
Holman.


                                       22
                                     


         The 1999 Stock Option Plan, the 1999 Stock Subscription Plan and the
2002 Employee Stock Purchase Plan each has been approved by our shareholders.
However, we are submitting to the shareholders for approval (1) a stock option
agreement granting 100,000 options to our Chief Executive Officer and (2) a
restricted stock grant of 50,000 shares of our common stock to our Chief
Executive Officer. Because the grant of stock options and the grant of
restricted stock were made, subject to shareholder approval, after the end of
the fiscal 2003, the table below does not include information about those
arrangements.

         The 2003 Stock Option Agreement with Edwin J. Holman, which was a grant
of 200,000 options outside of our stock option plan, and the 2003 Restricted
Stock Agreement with Edwin J. Holman, which was a grant of 50,000 shares of
restricted stock, were each adopted without shareholder approval, in accordance
with the inducement grant exception under the NASD listing standards. The
material terms of those grants are described under the heading "Employment
Agreements and Other Arrangements - Employment Contracts - Edwin J. Holman." No
additional options are issuable under the 2003 Stock Option Agreement with Mr.
Holman, and no additional shares of restricted stock are issuable under the 2003
Restricted Stock Agreement with Mr. Holman.

         The following table sets forth, for each of these plans and agreements,
the number of shares of our common stock subject to outstanding options,
warrants, and rights, the weighted-average exercise price of outstanding
options, warrants, and rights, and the number of shares remaining available for
future award grants as of January 31, 2004.

           EQUITY COMPENSATION PLAN INFORMATION AS OF JANUARY 31, 2004


                                                NUMBER OF SHARES                                        NUMBER OF SHARES
                                                TO BE ISSUED UPON                                    REMAINING AVAILABLE FOR
                                                   EXERCISE OF             WEIGHTED AVERAGE          FUTURE ISSUANCE UNDER
                                                   OUTSTANDING             EXERCISE PRICE OF        EQUITY COMPENSATION PLANS
                                                OPTIONS, WARRANTS        OUTSTANDING OPTIONS,     (EXCLUDING SHARES REFLECTED
PLAN CATEGORY                                       AND RIGHTS             WARRANTS AND RIGHTS         IN THE FIRST COLUMN)
- -----------------------------------------------------------------------------------------------------------------------------

Equity compensation plans                           2,148,733 1               $ 15.28                      3,143,107 2,3
approved by stockholders

Equity compensation plans                             200,000                 $ 11.43                                  0
not approved by stockholders
                                                   ----------                --------                     ---------------
Total                                               2,348,733                 $ 14.34                          3,143,107
                                                   ==========                ========                     ===============



1    All of these shares were subject to stock options outstanding under our
     1999 Stock Option Plan.
2    Of these shares, 694,389 were available for additional stock option grants
     under our 1999 Stock Option Plan, 381,640 shares were available for
     issuance at fair market value under our 1999 Stock Subscription Plan, and
     1,425,308 were available for purchase under our 2002 Employee Stock
     Purchase Plan.
3    Under the 1999 Stock Option Plan as currently in effect, on May 29, 2004 an
     additional number of shares of our common stock, equal to three percent
     (3%) of the total number of issued and outstanding shares of our common
     stock as of the close of business on that date will become available for
     stock option grant purposes under our 1999 Stock Option Plan. However,
     under the proposed amendments to the 1999 Stock Option Plan, the increase
     will be effective on May 29, 2004, but will be calculated as of March 29,
     2004, which will result in an increase of 520,871 shares available under
     the plan based on the number of shares of our common stock issued and
     outstanding on that date.


                                       23
                                     EXECUTIVE OFFICERS


         The following is a list of our current executive officers, followed by
their biographical information (other than Mr. Mang,Holman, whose biographical
information appears on page 810 of this proxy statement):
Name
Age
Position
Robert B. Mang

NAME                                AGE             POSITION


Edwin J. Holman                     57
Chief Executive Officer and Chairman of the
Company and Director
C. David Zoba
51
                       52              Executive Vice President, General Counsel and
Secretary
Edward S. Wozniak
57
                   58              Senior Vice President, Chief Financial Officer
Dennis
Edward J. Feldmann
50
Brett                     49              Senior Vice President, Human Resources
Jeffrey R. Brown                    49              Senior Vice President, General Merchandise
Manager, Outdoors
Joan M. Hurley
54
Apparel and
Footwear
Galen R. Erickson                   52              Senior Vice President, Communications and
Community Commitment
Charles F. Nelson
57
Logistics
David M. Pritchett                  39              Senior Vice President, Minister of Culture
David M. Pritchett
38
Senior Vice President, Director of Store Operations
Lindsay J. Rice
48
                     49              Senior Vice President, General Merchandise
Manager, Athletics
Hardgoods
Paul C. Wagner
37
                      38              Senior Vice President, Chief Information Officer
Edward J. Whitehead
47
                 48              Senior Vice President, Marketing
C. David ZobaDAVID ZOBA has served as Executive Vice President, General Counsel
and Secretary since May 2001 and has primary responsibility for real estate and
store planning, and is Galyan’sthe Company's chief legal officer. He served as a
director of Galyan’sthe Company from August 1999 until May 2001. Mr. Zoba served as the
Senior Vice President and Counsel-Real Estate for Limited Brands from 1999 until
May 2001, and as Vice President and Senior Counsel —- Real Estate from 1994 to
1999.
Edward

         EDWARD S. WozniakWOZNIAK has served as Senior Vice President and Chief
Financial Officer since February 2001. From April 1998 to October 2000, Mr.
Wozniak served as Senior Vice President and Chief Financial Officer for
10
David’s David's
Bridal Inc.

         From November 1996 to April 1998, Mr. WozniakEDWARD J. BRETT, has served as Senior Vice President, Chief Administrative Officer for Things Remembered,Human Resources
since January 2004. From December 2001 to May 2003, Mr. Brett served as
Corporate Vice President of Store Innovation and Development at Circuit City
Stores, Inc., a subsidiary From May 2000 to December 2001, he served as Vice President,
Northeast Division President and from 1995 to 2000, Mr. Brett served as Vice
President of Cole National Corporation.
Dennis J. FeldmannSuperstores Human Resources & Training and Human Resources Director
of Central Division at Circuit City.

         JEFFREY R. BROWN has served as Senior Vice President, General
Merchandise Manager, Outdoors,Apparel and Footwear, since May 2001.2003. From April 1998 to1974 until May
2001, he was2003, Mr. Brown held various merchandising and management positions with
Kaufmann's Department Stores, serving as Senior Vice President, General
Merchandise Manager Outdoors. From August 1996 to April 1998, Mr. Feldmann served as Divisional Merchandise Manager, Outdoors. From April 1985 to August 1996, Mr. Feldmann served as Vice President of Merchandising at All About Sports, a division of Van Leunen’s, Inc., where he was responsible for merchandising, marketing, store design and merchandising planning and allocation. Van Leunen’s, Inc. filed for bankruptcy protection infrom March 1989 until May 1997.
Joan M. Hurley2003.

         GALEN R. ERICKSON has served as Senior Vice President, Communications and Community CommitmentLogistics, since
February 2002. SheMay 2003. From 1996 until May 2003, Mr. Erickson served as Senior Vice
President, DirectorDistribution of Marketing from May 2001 to February 2002, and as Director of Marketing from May 1997 to May 2001. From June 1995 to March 1997, Ms. Hurley served as General Manager of Market Development for Best Lock Corporation.
Charles F. NelsonBlockbuster Entertainment.

         DAVID M. PRITCHETT has served as Senior Vice President, Minister of Culture since May 2001. From November 1995 to May 2001, he served as Minister of Culture.
David M. Pritchetthas served as Senior Vice President, Director of Store
Operations, since May 2001. From March 1996 to May 2001, he was Director of
Store Operations.
Lindsay

         LINDSAY J. RiceRICE has served as Senior Vice President, General
Merchandise Manager, Athletics,Hardgoods, since May 2001.October 2003. He served as Senior Vice
President, General Merchandise Manager, Athletics from May 2001 until October
2003, and as General Merchandise Manager, Athletics from April 1998 until May
2001.

         From January 1990 to November 1997, Mr. Rice served as Executive Vice President of Merchandising at Oshman’s Sporting Goods, Inc. where he was responsible for merchandising, marketing, store design and merchandise planning and allocation. He also held various other positions at Oshman’s Sporting Goods, Inc., where he was employed for 21 years.
PaulPAUL C. WagnerWAGNER has served as Senior Vice President, Chief Information
Officer since September 2001. He served as


                                       24
                                     

Chief Information Officer from January 2000 to September 2001. He served as Vice
President of Information Systems at Finish Line, Inc. from August 1995 until
January 2000.
Edward

         EDWARD J. WhiteheadWHITEHEAD has served as Senior Vice President, Marketing
since February 2002. From March 2001 until February 2002, Mr. Whitehead served
as President of Eyestorm, Inc., a wholly-owned subsidiary of Eyestorm.com Ltd.,
a company that markets and distributes art media products. From January 2000
until March 2001, Mr. Whitehead served as Director of Marketing and Strategic
Planning for Harrods Ltd. in London. From May 1998 until January 2000, Mr.
Whitehead was Founder and CEO of the Workshop, Inc., an agency specializing in
marketing, advertising and strategic branding.

                             Prior to this, Mr. Whitehead was Executive Vice President of Merchandising for Mossimo, Inc. from December 1995 until April 1998.
11
EXECUTIVE COMPENSATION


         The following table sets forth compensation earned during the fiscal
periods indicated by the person who served as our Chief Executive Officer at the
end of the most recent fiscal year and the other four most highly compensated
executive officers during the most recent fiscal periods indicated.year. We refer to these
individuals as our named executive officers.
Summary

                           SUMMARY COMPENSATION TABLE


                                                                                       LONG-TERM COMPENSATION
                                                                                                AWARDS

                                                        ANNUAL COMPENSATION          RESTRICTED       SECURITIES
                                        FISCAL                                         STOCK          UNDERLYING      ALL OTHER
NAME AND PRINCIPAL POSITION              YEAR          SALARY          BONUS          AWARD(S)          OPTIONS     COMPENSATION
- --------------------------------------------------------------------------------------------------------------------------------
FORMER CEO AND CHAIRMAN
OF THE COMPANY

Robert B. Mang 1                         2003       $  600,000      $         0               0          72,000        $  10,587 2
                                         2002          550,000          120,313               0          48,000           11,798 3
                                         2001          500,000          185,504               0          15,000           10,861 4

CURRENT CEO AND OTHER
NAMED EXECUTIVE OFFICERS
Edwin J. Holman 5                        2003       $  250,721      $   705,000 6    $  720,000 7       300,000        $  86,730 8
CHIEF EXECUTIVE OFFICER (FORMER
PRESIDENT AND CHIEF OPERATING OFFICER)

C. David Zoba 9                          2003       $  350,000      $   100,000 10            0          30,000        $   8,043 10
EXECUTIVE VICE PRESIDENT,                2002          325,000          140,625 11            0          21,000          170,282 11
GENERAL COUNSEL AND SECRETARY            2001          257,692          174,202 12            0         110,000          124,863 12

Charles F. Nelson 13                     2003       $  269,231      $         0               0              --        $   3,288 14
FORMER SENIOR VICE PRESIDENT,            2002          250,000           23,438               0              --            3,144
14
MINISTER OF CULTURE                      2001          248,461           46,376               0           5,000            5,267 14

Edward S. Wozniak 15                     2003       $  266,154      $         0               0          24,000        $   6,808 16
SENIOR VICE PRESIDENT                    2002          243,808           26,797               0          27,000          128,511 17
CHIEF FINANCIAL OFFICER                  2001          205,769           41,738               0          40,000           61,598 18


1    Mr. Mang resigned as Chief Executive Officer and Chairman of the Company on
     March 1, 2004.
2    Represents $7,500 in financial planning services and $3,087 in matching
     contributions under our 401(k) plan.
3    Represents $7,500 in financial planning services and $4,298 in matching
     contributions under our 401(k) plan.
4    Represents $7,408 in relocation expenses and $3,453 in financial planning
     services.
5    Mr. Holman joined Galyan's as President and Chief Operating Officer in
     September 2003, and was named our Chief Executive Officer on March 1, 2004.
6    Represents a payment of $225,000 due under his employment agreement at the
     end of fiscal 2003 and $480,000, which is the value of 40,000 shares of
     restricted stock that were granted on September 3, 2003 and immediately
     vested, based on the closing price of Galyan's common stock on that date of
     $12.00.


                                       25
                                     

7    Represents the value of 60,000 shares of restricted common stock that were
     granted on September 3, 2003 but not immediately vested, based on the on
     the closing price of Galyan's common stock on that date of $12.00. These
     shares of restricted stock vest in three equal annual installments on each
     anniversary of the date of grant. At the end of fiscal 2003, based on the
     closing price of Galyan's common stock on January 31, 2004 of $8.81 per
     share, the 60,000 shares of restricted stock had a value of $528,600. In
     the event that Galyan's pays any dividends during the vesting period, the
     dividends will be paid on the shares of restricted stock.
8    All Other Compensation Table
 
 
 
 
 
 
 
 
 
Long-term
Compensation
Awards
 
 
 
 
 
 
 
 
Annual Compensation
 
 
 
 
 
 
 
 
Fiscal
Year
 
 
 
Securities
Underlying
Options (1)
 
All Other
Compensation
 
 
Name and Principal Position
 
Salary
 
 
Bonus
 
 
 
 
 
 
 
 
 
 
 
 
 
Robert B. Mang
2002
   
$
550,000
 
   
$
120,313
 
   
48,000
   
$
11,798
(2)
 
   Chief Executive Officer and
2001
 
 
500,000
 
 
 
185,504
 
 
15,000
 
 
10,861
(3)
 
   Chairman of the Company
2000
 
 
155,769
(4)
 
 
680,000
(5)
 
165,000
 
 
1,186,664
(6)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
C. David Zoba (7)
2002
 
$
325,000
 
 
$
140,625
(8)
 
21,000
 
$
170,282
(8)
 
   Executive Vice President,
2001
 
 
257,692
 
 
 
174,202
(9)
 
110,000
 
 
124,863
(9)
 
   General Counsel and Secretary
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Charles F. Nelson
2002
 
$
250,000
 
 
$
23,438
 
 
—
 
$
3,144
(10)
 
   Senior Vice President
2001
 
 
248,461
 
 
 
46,376
 
 
5,000
 
 
5,267
(10)
 
   Minister of Culture
2000
 
 
243,750
 
 
 
283,586
 
 
4,500
 
 
4,816
(10)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Edward J. Whitehead (11)
2002
 
$
250,000
 
 
$
23,438
 
 
44,000
 
$
25,306
(12)
 
   Senior Vice President
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Marketing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Edward S. Wozniak (13)
2002
 
$
243,808
 
 
$
26,797
 
 
27,000
 
$
128,511
(14)
 
   Senior Vice President
2001
 
 
205,769
 
 
 
41,738
 
 
40,000
 
 
61,598
(15)
 
   Chief Financial Officer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)     
In addition to the number of options in our Company granted to our named executive officers, in fiscal 2000 Mr. Mang was granted 41,000 stock appreciation rights in MVP.com, a related party that has ceased operations. Since MVP.com ceased operations and voluntarily made a general assignment for the benefit of creditors, these SARs have no value.
(2)
Represents $7,500 in financial planning services and $4,298 in matching contributions under our 401(k) plan.
(3)
Represents $7,408 in relocation expenses and $3,453 in financial planning services.
(4)
Mr. Mang was hired as Chief Executive Officer and Chairman of our Company on September 29, 2000, effective October 1, 2000. His salary in fiscal 2000 was based on an annual salary of $450,000, with $155,769 representing the entire amount he received from our Company as salary for his partial year of employment in that year.
(5)
Represents a signing bonus of $500,000 and a bonus of $180,000 for fiscal 2000.
(6)
Represents $350,000 relating to the sale of 70,000 shares of our common stock at a price below fair value, $450,000 relating to the issuance of 90,000 options to purchase shares of our common stock with an exercise price below fair value, $295,000 of reimbursement by us for tax obligations relating to the sale of shares at a price below fair value, $72,500 in relocation expenses paid by us and $19,164 of reimbursement by us for tax obligation relating to the relocation expenses.
(7)
Mr. Zoba joined our Company in May 2001.
(8)
Bonus includes a $100,000 payment due under his employment agreement at the end of fiscal 2002. All Other Compensation represents $160,926 in relocation expenses, $5,750 in financial planning services and $3,606 in matching contributions under our 401(k) plan.
(9)
Bonus includes a $100,000 payment due under his employment agreement at the end of fiscal 2001. All Other Compensation represents $120,370 in relocation expenses, $2,762 in financial planning services and $1,731 in matching contributions under our 401(k) plan.
(10)   
Represents our matching contribution under our 401(k) plan.
(11)
Mr. Whitehead joined our Company in February 2002.
(12)
Represents relocation expenses.
(13)
Mr. Wozniak joined our Company in February 2001.
12
(14)   
Represents $121,452 in relocation expenses, $4,500 in financial planning services and $2,559 in matching contributions under our 401(k) plan.
(15)
Represents $59,547 in relocation expenses and $2,051 in financial planning services.
Option Grantsrepresents $83,605 in Last Fiscal Year
relocation expenses and $3,125
     in financial planning services.
9    Mr. Zoba joined Galyan's in May 2001.
10   Bonus includes a $100,000 payment due under his employment agreement at the
     end of fiscal 2003. All Other Compensation represents $5,000 in financial
     planning services and $3,043 in matching contributions under our 401(k)
     plan.
11   Bonus includes a $100,000 payment due under his employment agreement at the
     end of fiscal 2002. All Other Compensation represents $160,926 in
     relocation expenses, $5,750 in financial planning services and $3,606 in
     matching contributions under our 401(k) plan.
12   Bonus includes a $100,000 payment due under his employment agreement at the
     end of fiscal 2001. All Other Compensation represents $120,370 in
     relocation expenses, $2,762 in financial planning services and $1,731 in
     matching contributions under our 401(k) plan.
13   Mr. Nelson retired as Senior Vice President, Minister of Culture, effective
     as of January 31, 2004.
14   Represents our matching contribution under our 401(k) plan.
15   Mr. Wozniak joined Galyan's in February 2001.
16   Represents $3,750 in financial planning services and $3,058 in matching
     contributions under our 401(k) plan.
17   Represents $121,452 in relocation expenses, $4,500 in financial planning
     services and $2,559 in matching contributions under our 401(k) plan.
18   Represents $59,547 in relocation expenses and $2,051 in financial planning
     services.

OPTION GRANTS IN LAST FISCAL YEAR

         The following table sets forth options granted during fiscal 20022003 to
each of our named executive officers. Each grant was made under the 1999 stock option plan, and each vests in three equal
installments beginning one year after the date of grant.grant and, except for a grant
of 200,000 options to Mr. Holman approved by the Board in connection with his
hiring and described below under "Equity Compensation Plan Information," each
grant during fiscal 2003 was made under the 1999 stock option plan. The
potential realizable value is calculated assuming that the fair value on the
date of grant of our common stock appreciates at the indicated annual rate
compounded annually for the entire term of the option, and that the option is
exercised and sold on the last day of its term for the appreciated stock price.
The assumed rates of appreciation are mandated by the rules of the SEC and do
not represent our estimate of the future prices or market value of our common
stock.
Option Grants in Last Fiscal Year
  Name
 Number of
securities
underlying
options
granted
   
    Percent of
total options
granted to
employees in
fiscal year 
 
 Exercise
price
per share
   
  Fair value
on date
of grant
   
 Expiration
date
   
Potential realizable
value at assumed
annual rates of price
appreciation for
option term
 
 
 
 5%
 
 10%
 
 
 
 
 
 
 
 
Robert B. Mang
48,000
   
8.0
%
   
$
20.64
   
$
20.64
   
05/29/09
   
$
403,323
   
$
939,913
 
C. David Zoba
21,000
 
3.5
%
 
 
20.64
 
 
20.64
 
05/29/09
 
 
176,454
 
 
411,212
 
Charles F. Nelson
0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Edward J. Whitehead
9,000
 
1.5
%
 
 
20.64
 
 
20.64
 
05/29/09
 
 
75,623
 
 
176,234
 
 
35,000
 
5.8
%
 
 
12.81
 
 
12.81
 
02/26/09
 
 
182,523
 
 
425,357
 
Edward S. Wozniak
27,000
 
4.5
%
 
 
20.64
 
 
20.64
 
05/29/09
 
 
226,869
 
 
528,701
 
Aggregated Option Exercises in Fiscal 2002 and Fiscal Year-End Option Values



                        OPTION GRANTS IN LAST FISCAL YEAR


                                  PERCENT OF
                                     TOTAL                                                      POTENTIAL REALIZABLE VALUE
                     NUMBER OF     OPTIONS                                                        AT ASSUMED ANNUAL RATES
                    SECURITIES    GRANTED TO                                                       OF PRICE APPRECIATION
                    UNDERLYING     EMPLOYEES    EXERCISE    FAIR VALUE                                FOR OPTION TERM
                      OPTIONS      IN FISCAL     PRICE      ON DATE OF     EXPIRATION    ---------------------------------------
       NAME           GRANTED         YEAR     PER SHARE       GRANT          DATE            0%              5%             10%
- ----------------------------------------------------------------------------------------------------------------------------------

Robert B. Mang        22,000 1       2.8%       $ 11.43      $ 11.43         9/2/2010    $      --      $  102,369    $    238,564
                      50,000 2       6.4%         13.66        13.66        5/30/2010           --         278,050         647,974

Edwin J. Holman      200,000 3      25.6%         11.43        12.00         9/3/2010      114,000         930,632       2,168,767
                     100,000 3      12.8%         11.43        12.00         9/3/2010       57,000         465,316       1,084,384

C. David Zoba         30,000 2       3.9%         13.66        13.66        5/30/2010           --         166,830         388,784

Charles F. Nelson         --          --            --           --               --           --              --              --

Edward S. Wozniak     24,000 2       3.1%         13.66        13.66        5/30/2010           --         133,464         311,027



1 Options granted on September 2, 2003.
2 Options granted on May 30, 2003.
3 Options granted on September 3, 2003.


                                       26
                                     


  AGGREGATED OPTION EXERCISES IN FISCAL 2003 AND FISCAL YEAR-END OPTION VALUES

None of our named executive officers exercised any stock options in fiscal 2002.2003.
The following table provides summary information concerning the year-end values
of unexercised options held by the named executive officers.
Aggregate Year-End Option Table
 
Number of securities
underlying unexercised
options at February 1, 2003
 
Value of unexercised
in-the-money options at
February 1, 2003 (1)
 
 
Name
Exercisable
 
Unexercisable
 
Exercisable
 
Unexercisable
 
 
 
Robert B. Mang
115,000
   
113,000
   
$
8,400
   
$
4,200
C. David Zoba
36,667
 
94,333
 
 
—
 
 
—
Charles F. Nelson
33,834
 
4,833
 
 
2,053
 
 
210
Edward J. Whitehead
—
 
44,000
 
 
—
 
 
—
Edward S. Wozniak
13,335
 
53,665
 
 
—
 
 
—


                                           AGGREGATE YEAR-END OPTION TABLE


                                              NUMBER OF SECURITIES UNDERLYING
                                                  UNEXERCISED OPTIONS AT                   VALUE OF UNEXERCISED IN-THE-MONEY
                                                     JANUARY 31, 2004                      OPTIONS AT JANUARY 31, 2004 (1)
                                           
Value is calculated--------------------------------------------------------------------------------------

NAME                                       EXERCISABLE            UNEXERCISABLE             EXERCISABLE             UNEXERCISABLE
- ---------------------------------------------------------------------------------------------------------------------------------
Robert B. Mang ..........................    191,000                 109,000                     N/A                      N/A
Edwin J. Holman .........................          0                 300,000                     N/A                      N/A
C. David Zoba ...........................     80,333                  80,667                     N/A                      N/A
Charles F. Nelson .......................     37,000                   1,667                     N/A                      N/A
Edward S. Wozniak .......................     35,667                  55,333                     N/A                      N/A


1    Based on the basis of the number of shares subject to each option, multiplied by the excess of the fair market value of a share of common stock at fiscal year end ($10.14) over the exercise price of such option.
13
Equity Compensation Plan Information
     We currently maintain the following compensation plans under which our equity securities are authorized for issuance:
1999 Stock Option Plan;

1999 Stock Subscription Plan; and

2002 Employee Stock Purchase Plan.
     Eachclosing stock price on January 31, 2004 of these plans has been approved by our shareholders. The following table sets forth, for each$8.81 per share,
     none of these plans, the number of shares of our common stock subject to outstanding options, warrants, and rights, the weighted-average exercise price of outstanding options, warrants, and rights, and the number of shares remaining available for future award grants as of February 1, 2003.
Equity Compensation Plan Table
Plan category
Number of shares
to be issued upon
exercise of
outstanding options,
warrants and rights
 
Weighted average
exercise price of
outstanding options,
warrants and rights
 
Number of shares
remaining available for
future issuance under
equity compensation plans
(excluding shares reflected
in the first column)
 
 
Equity compensation plans approved by
 
 
   
 
 
 
   
 
 
   stockholders
1,855,834
(1)
 
      $
15.84
      
 
2,458,315
(2)(3)
Equity compensation plans not approved by
 
 
 
 
 
 
 
 
 
   stockholders
N/A
 
 
 
N/A
 
 
N/A
 
Total
1,855,834
 
 
$
15.84
 
 
2,458,315
 
(1)     
All of these shares were subject to stock options outstanding under our 1999 Stock Option Plan.
(2)
Of these shares, 606,883 were available for additional stock option grants under our 1999 Stock Option Plan, 381,640 shares were available for issuance in the form of stock bonuses under our 1999 Stock Subscription Plan, and 1,469,792 were available for purchase under our 2002 Employee Stock Purchase Plan.
(3)
Effective May 29, 2003, an additional number of shares of our common stock, equal to three percent (3%) of the total number of issued and outstanding shares of our common stock as of the close of business on that date, will become available for stock option grant purposes under our 1999 Stock Option Plan. In addition, effective May 29, 2004, an additional number of shares of our common stock equal to three percent (3%) of the total number of issued and outstanding shares of our common stock as of the close of business on that date, will become available for stock option grant purposes under our 1999 Stock Option Plan.
14
named executive officers had in-the-money options.

                  EMPLOYMENT AGREEMENTS AND OTHER ARRANGEMENTS
Employment Contracts
Robert B. Mang


EMPLOYMENT CONTRACTS

         THE COMPANY HAS EMPLOYMENT CONTRACTS WITH THREE OF ITS NAMED EXECUTIVE
OFFICERS, WHICH ARE DESCRIBED BELOW.


         EDWIN J. HOLMAN

         In September 2000,August 2003, we entered into an employment agreement with Mr. Mang,Holman
to be our President and Chief Operating Officer. In March 2004, Mr. Holman
became our Chief Executive Officer. In connection with his agreement to become
our Chief Executive Officer, we granted him 100,000 options to acquire our
common stock under our 1999 stock option plan, and Chairmanwe agreed to grant him,
subject to shareholder approval, 50,000 restricted shares of our common stock
and an additional 100,000 options to acquire our common stock. Otherwise, except
as identified below, the terms of his August 2003 employment agreement to be our
President and Chief Operating Officer continues to apply to his employment as
our Chief Executive Officer.

         The term of the Company, for an initial term ofAugust 2003 agreement is three years, with an automatic
day-by-day renewal beginning after the second anniversary, so that there is
always a one year renewals thereafter unlessterm remaining under the agreement until either party notifieswe or Mr.
Holman elect to terminate the other toagreement or until another event triggering
termination occurs. Under the contrary at least 90 days prior to the end of the initial term or a renewal period, as applicable.agreement, Mr. Mang’sHolman's annual base salary was
$550,000 for fiscal 2002, and at least $600,000 for fiscal 2003. Under2003, and will be at least $650,000 for fiscal 2004 and
$700,000 for fiscal 2005. In addition, under the agreement, if we achieve
certain financial objectives, Mr. MangHolman is eligible to receive a target bonus
equal to 60%75% of his base salary. We agreed to increase to his target bonus to
90% of his base salary if we achieve certain financial objectives, and he hasupon naming him our Chief Executive Officer. In addition,
the ability to earn up to 200% of his target bonus can be increased by an uncapped, additional amount if we exceed
our targeted financial objectives by an amount determined by our Board of
Directors. With respect toMr. Holman was paid a guaranteed bonus of $225,000 for fiscal 2002, the Compensation Committee made Mr. Mang eligible for a2003,
and received no separate target bonus of 70%, rather than the 60% he was eligible to receive under the agreement. In March 2003, Mr. Mang received a bonus of $120,313 for fiscal 2002.
2003. Under the agreement, Mr.
Mang exercisedHolman is eligible to receive an annual grant of stock options, subject to a
rightminimum of 50,000 shares per year, pursuant to purchase 70,000 shares of our common1999 stock at $10.00 per share with $300,000 of financing provided by us, all of which he repaid in fiscal 2000. The fair value of our common stock at the time Mr. Mang purchased these shares, and when we granted him these options, was $15.00 per share. We have paid Mr. Mang $295,000 to pay the taxes owed by him as a result of our issuance to him of shares below their fair value. Upon beginning employment with us, Mr. Mang also received 90,000 options to purchase our common stock at a $10.00 exercise price and 75,000 options to purchase our common stock at a $20.00 exercise price. In addition, under the employment agreement, in fiscal 2000 we granted Mr. Mang stock appreciation rights for 41,000 units with respect to the common stock of MVP.com, Inc., a former affiliated party. Since MVP.com ceased operations in January 2001, these SARs have no value.
option plan.


                                       27
                                     


         If Mr. Mang’sHolman's employment is terminated by us without cause or by Mr.
MangHolman for good reason, he will be entitled to receive all earned but unpaid
salary and benefits as of the date of termination, anda lump sum payment equal to
his target bonus for the fiscal year in which his employment is terminated.of termination, and, if the termination
occurs after October 31 of the fiscal year of termination, the annual bonus, if
any, for that fiscal year based upon the Company's actual performance and paid
consistent with the administration of the Company's regular annual bonus
program. In addition, he will receive severance pay constituting the continuationcomprised of a lump sum
payment equal to his then current base salary, andcontinued health coverage and a
payment equal to what he would have received under our retirement plans, for the
longer of one year from the date of termination or three years from the date of
his employment agreement.
 In the event of such a termination, any unvested
restricted stock will immediately become vested.

         In the event of a change in control of the Company, unvested options
and restricted stock previously granted to Mr. MangHolman shall immediately become
vested on the date of such change of control. In addition, and in lieu of the
termination benefits described in the paragraph above, if a change in control
occurs and the Company or its successor terminates Mr. Holman's employment
without cause or Mr. Holman then terminates his employment for good reason
within one year following such change in control, Mr. Holman will receive a lump
sum payment equal to the sum of his annual base salary in effect on the date of
termination and his target bonus for the fiscal year in which the termination
occurs, multiplied by 2.5, plus an amount equal to the excise tax payable by Mr.
Holman under the Internal Revenue Code as a result of excess parachute payments
made to Mr. Holman resulting from the change in control.

         Mr. Holman has also agreed to be bound by noncompetitionnon-competition and nonhirenon-hire
provisions that apply until the secondfirst anniversary of termination of his
employment.


         In connection with the August 2003 agreement, Galyan's issued Mr.
Holman the following securities on September 3, 2003: (1) a restricted stock
grant of 100,000 shares of the Company's stock, (2) 100,000 options pursuant to
the Company's 1999 stock option plan and (3) 200,000 additional options pursuant
to a separate stock option agreement approved by the Board of Directors. The
grant of restricted stock vests as follows: 40% on September 3, 2003, and 20% on
each of the first, second and third anniversaries of Mr. Holman's commencement
date of employment. In the event Mr. Holman terminates his employment without
cause prior to the first anniversary of his employment, he must forfeit to the
Company an amount equal to the value of the restricted stock based upon the date
of grant. The options to acquire 200,000 shares of our common stock vest in
equal installments over three years, expire seven years after the date of grant
and otherwise have substantially the same as the terms of options issued under
the 1999 stock option plan. On September 3, 2003, the closing price of a share
of Galyan's common stock was $12.00, and the exercise price of the 100,000
shares of common stock issued under the 1999 stock option plan and the 200,000
shares of common stock issued under a separate agreement outside of the plan is
$11.43, which was the closing price of Galyan's common stock on September 2,
2003, Mr. Holman's first day of employment.

         C. David Zoba
DAVID ZOBA

         In May 2001,October 2003, we entered into ana new employment agreement with Mr.
Zoba, our executive vice president, general counsel and secretary, extending his
agreement for an initial term of threetwo years, with an automatic day-by-day renewal beginning after
the first anniversary, so that there is always a one year renewals thereafter unlessterm remaining under
the agreement until either party notifieswe or Mr. Zoba elect to terminate the other to the contrary at least 90 days prior to the end of the initial termagreement or
a renewal period, as applicable.until another event triggering termination occurs. Mr. Zoba’sZoba's annual base salary
was $325,000$350,000 for fiscal 20022003, and will be $350,000at least $375,000 for fiscal 2003.2004 and
$400,000 for fiscal 2005. Mr. Zoba will receive a bonus of $100,000 per year if
he remains employed by us on the last day of each fiscal year. In addition, underyear (or a pro rata
amount at the end of the term of the agreement, if less than a full year).


                                       28
                                     


         Under the agreement, Mr. Zoba is entitledeligible to receive a target bonus
equal to 40%50% of his base salary if we achieve our targetedcertain financial objectives, and
has the ability to earn up to 200% of his target bonus can be increased by an uncapped, additional amount if we exceed
our targeted financial objectives by an amount determined by our Board of
Directors. In MarchBecause we did not achieve our financial objectives for 2003, Mr.
Zoba received ano target bonus of $140,625 for fiscal 2002, which includes the2003, but did receive $100,000 he received for
remaining employed at the end of the fiscal year.
 Under the agreement, Mr. Zoba
exercised his rightis eligible to purchase 30,000 sharesreceive an annual grant of common stock at $19.00 per share for an aggregate purchase price of $570,000. In connection with his exercise, we loaned him $285,000options pursuant to finance the purchase of a portion of those shares and Mr. Zoba paid the remaining $285,000 in cash. Mr. Zoba issued to us a full recourse promissory note for the amount borrowed, which note bears simple interest at 7.5% per year and is secured by his shares of common stock. Mr. Zoba has repaid the note in full. Mr. Zoba also received 110,000 options to purchase our common1999
stock at an exercise price of $19.00 per share.
15
option plan.

         If Mr. Zoba’sZoba's employment is terminated by us without cause or by Mr.
Zoba for good reason, he will be entitled to receive all earned but unpaid
salary and benefits as of the date of termination and a lump sum payment equal
to his target bonus for the fiscal year in which his employment is terminated.of termination. In addition, he will
receive severance pay constituting the continuationcomprised of a lump sum payment equal to his then current
base salary, andcontinued health coverage and a payment equal to what he would have
received under our retirement plans, for the longer of one year from the date of
termination or two years from the date of his employment or May 29, 2004.
agreement. In the event
of a change in control of the Company, unvested options previously granted to
Mr. Zoba shall immediately become vested on the date of such change of control.

         Mr. Zoba has also agreed in the contract to be bound by noncompetitionnon-competition and nonhirenon-hire
provisions that apply until the later of the second anniversary of termination
of his employment.
Agreement with Joel L. Silverman, our Former President and Chief Operating Officer
employment or three years from the date of the agreement.

AGREEMENT WITH ROBERT B. MANG, OUR FORMER CHIEF EXECUTIVE OFFICER AND CHAIRMAN

         We entered into an agreement with Joel L. Silverman,Robert B. Mang, our former PresidentChief
Executive Officer and Chief Operating Officer,Chairman of the Company, formalizing his separation
arrangements with us. Under the agreement, Mr. SilvermanMang resigned from his position
as an officer of Galyan's effective March 1, 2004, and agreed to resign as a
director of Galyan’s effective March 4, 2002.Galyan's no later than May 14, 2004. Under the terms of our
separation agreement with him, Mr. SilvermanMang will remain an employee of Galyan's,
assisting Mr. Holman, our new Chief Executive Officer, with merchandising,
marketing and other transition issues, for a period ending no later than May 31,
2004. During his transitional period of employment, Mr. Mang will receive his
normal base salary at the rate of $550,000$650,000 per year (payable under our normal
payroll arrangements) through October 1, 2003,. In addition, within ten business days after the end of
his transitional period of employment, Mr. Mang will receive a bonus with respectpayment in
the gross amount of $585,000 (subject to reductions for taxes), representing his
target bonus for fiscal 20022004, a severance payment in the gross amount of
$330,000, payable at the time we pay annual bonuses$866,667 (subject to reductions for that year,taxes), and a payment representinglump sum equal to the value of all vested and unvested retirement benefits
whichthat Mr. Mang would have been vested as of Octoberaccrued under Galyan's retirement plans through July 1,
2003, which was approximately $370,000.2005 were he to remain employed through such date. In addition, all unvested
options granted to Mr. Silverman vested immediately upon execution of the agreement,Mang vest on May 31, 2004, and those and all other
outstanding options were made exercisable for a two-year period.until March 31, 2006. We have also
agreed to allow Mr. Silverman,Mang, partially at his expense, to continue his group health
insurance coverage through October 1, 2003.September 30, 2005. Under the agreement, Mr. SilvermanMang
waived all other consideration to which he may have been entitled and released
us from any and all claims related to his employment. He also agreed not to
compete with us or directly or indirectly or to solicit any of our employees for a
two-yearone-year period.
Consulting Agreements


CONSULTING AGREEMENT WITH CHARLES F. NELSON, OUR FORMER SENIOR VICE PRESIDENT,
MINISTER OF CULTURE

         In January 2004, we entered into a consulting arrangement with Charles
Nelson, formerly our Senior Vice President, Minister of Culture, under which we
agreed that he would retire effective January 31, 2004, and that Galyan's would
pay him $10,000 per month for twelve months for employee and executive search
services. We have also agreed to pay him a success fee of 25% of the salary and
bonus earned in the first year by any person hired by the Company as a result of
the efforts of Mr. Nelson. Any success fees will be credited against the monthly
retainer. If both Mr. Nelson and Galyan's agree,


                                       29
                                     


the term of the agreement may be extended one year. In connection with the
agreement, Galyan's also agreed to extend the exercise period for Mr. Nelson's
options until January 31, 2006. In addition, Mr. Nelson released Galyan's of any
potential claims, and agreed not to compete with Galyan's or solicit for hire
any of Galyan's employees for a two year period ending January 31, 2006.

CONSULTING AGREEMENTS

         See “Compensation"Compensation Committee Interlocks and Insider Participation”Participation" below
for a description of certainan oral consulting agreementsagreement that we have with Mr. MatthewsStarrett
and the oral consulting agreement that we had with Mr. Starrett.
16
Matthews, which was
terminated in May 2003.

                          COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
This section of the proxy statement will not be deemed to be incorporated by reference by any general statement incorporating this proxy statement into any of our filings under the Securities Act of

         THIS SECTION OF THE PROXY STATEMENT WILL NOT BE DEEMED TO BE
INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING THIS PROXY
STATEMENT INTO ANY OF OUR FILINGS UNDER THE SECURITIES ACT OF 1933 or the Securities Exchange Act ofOR THE
SECURITIES EXCHANGE ACT OF 1934, except to the extent we specifically incorporate this information by reference, and will not otherwise be deemed “filed” under either such Acts.
EXCEPT TO THE EXTENT WE SPECIFICALLY
INCORPORATE THIS INFORMATION BY REFERENCE, AND WILL NOT OTHERWISE BE DEEMED
"FILED" UNDER EITHER SUCH ACTS.

         The Galyan’sGalyan's Compensation Committee of the Board of Directors (the
“Committee”"Committee") is responsible for developing and administering the policies and
practices associated with the total compensation for executives, subject to the
approval of the Board as deemed necessary or appropriate, and making
recommendations to the Board on all elements of compensation of our executive
officers. The Committee also has the authority to administer and make award
grants under the 1999 Stock Option Plan.
Executive Compensation Philosophy
 The Committee also has authority to
administer option award grants made to Mr. Holman in September 2003 and March
2004.

EXECUTIVE COMPENSATION PHILOSOPHY

         It is the philosophy of the Committee that a significant portion of
each executive’sexecutive's possible compensation be directly linked to Galyan’sGalyan's
performance and appreciation in shareholder value. Thus, a significant portion
of each executive’sexecutive's compensation is “at"at risk.”" The guiding principles behind
total compensation for executive officers are as follows:


         o    Provide a competitive total compensation package that enables us
              to attract, retain and motivate executive talent to achieve our
              goals and objectives.



         o    Provide variable compensation opportunities on an annual basis
              that are directly linked to Galyan’sGalyan's performance goals.



         o    Provide long-term equity participation that aligns executive
              compensation with appreciated shareholder value.



         o    Recognize and reward individual performance.
Base Salary



                                       30
                                     


BASE SALARY

         The Committee sets base salaries, which are subject to annual
adjustment, by the Committee.Committee, except that the base salaries for Messrs. Holman
and Zoba are set forth in employment agreements we have entered into with each
of them. The Committee strives to set and maintain base salaries at levels
competitive with those paid by other retailers. In setting base salary levels,
the Committee considers, among other factors it may deem relevant in the
circumstances, salaries for comparable positions at comparable retail companies,
using independent survey data of other representative retailers, adjusted for
company size. The Committee also sets base salary levels based on its subjective
assessment of individual performance and future contributions, satisfaction of
Galyan’sGalyan's performance objectives, competitive issues, length of service and
internal equity in light of the executives’executives' relative positions and
responsibilities.
Short-Term Incentive Compensation


SHORT-TERM INCENTIVE COMPENSATION

         Each year, the Committee establishes an annual incentive compensation
program that provides for cash awards based upon the achievement of specific
performance objectives established by the Committee based on operating income,
earnings per share or a similar financial performance metric. If Galyan’sGalyan's
achieves the Committee’sCommittee's financial performance objective, each executive officer
will earn a “target”"target" bonus established by the Committee with respect to the
officer. Although the Committee has discretion to determine “target”"target" bonus
levels, each executive’s “target”executive's "target" bonus level generally ranges from 30% to 70%90%
of his or her base salary. The Committee sets a minimum financial performance
standard below which no executive officer will be entitled to any of his or her
“target”"target" bonus, and also establishes whether and the extent to which partial
bonuses will be paid for performance that exceeds the minimum standard but falls
short of the original goal, as well as the extent to which bonuses greater than
the applicable “target”"target" will be paid for performance that exceeds goals. There
are no caps on the maximum level of bonuses. For fiscal 2002, Galyan’s2003, Galyan's financial
performance objectives were based on various specific and confidential operating
income goals. The fiscal 20022003 goals were not entirely achieved, but performance did exceed the established minimum standards.achieved. Accordingly, no fiscal
20022003 bonuses were paid to executives, albeit at less than 100% of the original “target” levels.
17
Long-Term Incentive Compensation
executives.

LONG-TERM INCENTIVE COMPENSATION

         The Committee intends to make annual grants of stock options under the
1999 Stock Option Plan to provide long-term equity participation that help to
further align management’smanagement's interests with the interests of Galyan’sGalyan's
shareholders. The Committee believes that option grants promote the continuity
of management and focus performance on long-term strategic and financial goals
and objectives, including improvement in shareholder value. In determining the
number of options to grant to an executive officer, the Committee takes into
consideration the position of the individual, the Committee’sCommittee's subjective
assessment of his or her performance, the individual’sindividual's previous and anticipated
contribution to Galyan’sGalyan's success and grant history, total compensation paid to
the executive, possible dilutive effects of the award, possible future stock
values, and industry practices and trends in general, with no one factor being
accorded any special weight. Each grant typically allows the individual to
acquire shares of our common stock at a price that is not less than the fair
market value of the shares at the close of business on the grant date. The
options typically vest in equal annual installments over a three-year period and
have a maximum term of seven years.
Compensation for the Chief Executive Officer
Base Salary


COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER FOR FISCAL 2003

         Robert B. Mang was appointed Chairman of the Company and Chief
Executive Officer effective October 1, 2000.2000, and served in that capacity until
his resignation as an officer on March 1, 2004. Pursuant to the terms of his
employment


                                       31
                                     

agreement, Mr. Mang received a base salary of $550,000 in fiscal 2002 and will receive a base salary of not less than $600,000 in fiscal 2003.
Short-Term Incentive Compensation
 In
addition, pursuant to the terms of his separation arrangement, Mr. Mang will
receive various payments described above under the heading "Employment
Agreements and Other Arrangements - Agreement with Robert B. Mang, our Former
Chief Executive Officer and Chairman."

SHORT-TERM INCENTIVE COMPENSATION

         For fiscal 2002,2003, Mr. Mang receiveddid not receive an incentive cash award of $120,313 under
the annual incentive compensation program established by the Committee. The award was based upon achievement of the confidential financial performance goals established by the Committee for fiscal 2002 and was paid in the current fiscal year. Mr.
Mang’s “target”Mang's "target" bonus for purposes of the annual incentive compensation plan for
fiscal 20022003 was 70%90% of his base salary, and his bonus for fiscal 2002 reflects partial payment of the “target” bonus.
Long-Term Incentive Compensation
salary.

LONG-TERM INCENTIVE COMPENSATION

         For fiscal 2002,2003, Mr. Mang received a stock option grantgrants covering 48,00072,000
shares of Galyan’sGalyan's common stock as part of Galyan’sGalyan's program of annual option
grants. The stock option hasoptions have a three-year vesting period, a maximum term of
seven years, and the exercise price was set at the fair market value of the
underlying stock on the date of grant. Pursuant to the terms of his separation
arrangements with Galyan's, these options and all other unvested options held by
Mr. Mang shall vest on May 31, 2004 and be exercisable until March 31, 2006. The
number of shares subject to such option grant to Mr. Mang was determined after
taking into consideration his position, the Committee’sCommittee's subjective assessment of
his performance and his previous and anticipated contribution to Galyan’sGalyan's
success, his total compensation, possible dilutive effects of the award,
possible future stock values, and industry practices and trends in general with
no one factor being accorded any special weight.
Tax Treatment


TAX TREATMENT

         Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to public corporations for compensation in excess of $1,000,000 paid
for any fiscal year to the corporation’scorporation's chief executive officer or to any of
the four other most highly compensated executive officers as of the end of the
fiscal year. However, the statute exempts qualifying performance-based
compensation from the deduction limit if certain requirements are met. The
Committee currently intends to structure stock option grants as qualifying
performance-based compensation for this purpose. Current base salary and
anticipated bonus levels are not expected to exceed or materially exceed the
Section 162(m) limit.
18


         The Board of Directors and Committee endeavor to maximize the
deductibility of compensation under Section 162(m) of the Internal Revenue Code
to the extent practicable while maintaining competitive compensation. Further,
because of ambiguities and uncertainties as to the application and
interpretation of Section 162(m) and the regulations issued thereunder, no
assurance can be given, notwithstanding the Committee’sCommittee's efforts, that
compensation intended by the Committee to satisfy the requirements for
deductibility under Section 162(m) does in fact do so.
Submitted by the Compensation Committee

Norman S. Matthews, Chair
Frank J. Belatti
Timothy J. Faber
John M. Roth
Peter Starrett
19


                                    Submitted by the Compensation Committee

                                    Norman S. Matthews, Chair
                                    Frank J. Belatti
                                    Timothy J. Faber
                                    John M. Roth
                                    Peter Starrett


                                       32
                                     
PERFORMANCE MEASUREMENT COMPARISON
COMPARSION

         The following graph compares the cumulative total shareholder return on
a $100 investment in our common stock with the cumulative total return of a $100
investment in (a) the Russell 2000 Index and (b) S&P 500 Specialty Retail Index
(a published industry index). The graph is intended to provide a relevant
comparison of total returns for the period from June 27, 2001 (the day our
common stock commenced trading) through March 24, 2003.29, 2004. Because our stock began
trading on June 27, 2001, the information in the graph is provided at fiscal
quarter-end intervals and at March 24, 2003,29, 2004, the record date for our annual
meeting. The total return on the common stock is measured by dividing the
difference between the common stock price at the end and the beginning of the
measurement period by the common stock price at the beginning of the measurement
period. The graph for our Company and each of the indices also assumes the
reinvestment of dividends. Note: We caution that past stock price performance
shown for our common stock is not necessarily indicative of future price
performance.
This performance graph will not be deemed to be incorporated by reference by any general statement incorporating this proxy statement into any of our filings under the Securities Act of

         THIS PERFORMANCE GRAPH WILL NOT BE DEEMED TO BE INCORPORATED BY
REFERENCE BY ANY GENERAL STATEMENT INCORPORATING THIS PROXY STATEMENT INTO ANY
OF OUR FILINGS UNDER THE SECURITIES ACT OF 1933 or the Securities Exchange Act ofOR THE SECURITIES EXCHANGE ACT
OF 1934, except to the extent we specifically incorporate this information by reference, and shall not be deemed “soliciting material” or otherwise deemed “filed” under either such Acts.
GALYAN’SEXCEPT TO THE EXTENT WE SPECIFICALLY INCORPORATE THIS INFORMATION BY
REFERENCE, AND SHALL NOT BE DEEMED "SOLICITING MATERIAL" OR OTHERWISE DEEMED
"FILED" UNDER EITHER SUCH ACTS.

                         GALYAN'S TRADING COMPANY, INC.
Comparison of Cumulative Total Return
June

                      COMPARISON OF CUMULATIVE TOTAL RETURN
                         JUNE 27, 2001 to March 24, 2003
Total Return to Shareholders
(Dividends reinvested monthly)
 
  Base
Period
6/27/01
 
Periods Ending
 
 
Company / Index
 
8/4/01
 
11/3/01
 
2/2/02
 
5/4/02
 
8/3/02
 
11/2/02
 
2/1/03
 
3/24/03
 
 
 
 
 
 
 
 
 GALYAN'S TRADING CO INC
100
   
59.60
   
53.74
   
65.46
   
93.36
   
60.58
   
56.08
   
49.54
   
53.74
 RUSSELL 2000 INDEX
100
 
98.41
 
87.80
 
97.64
 
104.55
 
77.07
 
78.81
 
76.77
 
75.90
 S&P 500 SPECIALTY RETAIL
100
 
104.17
 
87.77
 
107.31
 
106.10
 
72.77
 
78.16
 
66.50
 
72.96
20
TO MARCH 29, 2004
                          TOTAL RETURN TO SHAREHOLDERS
                         (DIVIDENDS REINVESTED MONTHLY)


                                [GRAPHIC OMITTED]
     EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS:


                                                     INDEXED RETURNS
                   Base                              Quarter Ending
                  Period
Company / Index   6/27/01  8/4/01  11/3/01   2/2/02   5/4/02  8/3/02   11/2/02  2/1/03  5/3/03   8/2/03   11/1/03  1/31/04  3/29/04
- -----------------------------------------------------------------------------------------------------------------------------------

GALYANS TRADING
CO INC              100     59.60   53.74     65.46    93.36   60.58    56.08   49.54    78.90    56.42     64.04   43.04    48.12

RUSSELL 2000
INDEX               100     98.41   87.80     97.64   104.55   77.07    78.81   76.77    84.43    97.25    110.04  121.31   122.08

S&P 500
SPECIALTY
RETAIL              100    104.17   87.77    107.31   106.10   72.77    78.16   66.50    82.09    89.72    106.79  102.08   107.04



                                       33
                                     
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION


         Our Compensation Committee consists of Norman S. Matthews, as Chairman,
Frank J. Belatti, Timothy J. Faber, Norman S. Matthews, John M. Roth and Peter Starrett. None of the
members is an employee or was formerly one of our officers or an officer of one
of our subsidiaries. However, Mr. Faber is Vice President Treasury/Mergers and
Acquisitions of Limited Brands, Inc., Messrs. Matthews andMr. Starrett provideprovides consulting services
to Galyan’s,Galyan's, Mr. Matthews provided consulting services until May 2003, when the
arrangement for such services was terminated, and Mr. Roth is Vice President and
Managing Member of FS Capital Partners LLC, which is the general partner of FS
Equity Partners IV, L.P. Certain transactions and relationships between us and
Limited Brands, Messrs. Matthews and Starrett and Freeman Spogli or their
respective affiliates are described below.
Transactions with Freeman Spogli and Limited Brands


TRANSACTIONS WITH FREEMAN SPOGLI AND LIMITED BRANDS

         In connection with our 1999 recapitalization, we declared a dividend in
the form of a warrant to Limited Brands to purchase 1,350,000 shares of our
stock with an initial exercise price on September 1, 1999 of $10.00 per share.
Under the terms of the warrant, on the first day of each month from and
including October 1999 to and including September 2000, the exercise price
increased by an amount equal to 31/3%3% of the initial exercise price. On the
first day of each month thereafter, the exercise price increases by an amount
equal to 31/3%3% of the exercise price in effect on the preceding September 1.
This results in an increase of the exercise price at a rate of 40.0% per year.
The warrant became exercisable upon the completion of our initial public
offering in July 2001 and will expire in August 2009.


         We are also party to a stockholders agreement with FS Equity Partners IV,
L.P., Limited Brands, Inc., and G Trademark, Inc. and Benchmark Capital Partners IV, L.P. See “Information"Information Regarding
Certain Directorships and Voting Arrangements”Arrangements" above for a description of the
stockholders agreement.
 In addition, we are party to a 1999 registration rights
agreement granting FS Equity Partners IV, L.P., Limited Brands, Inc. and G
Trademark, Inc. rights to require us to register their shares for public resale,
pursuant either to a demand made by these shareholders or pursuant to a request
to participate in offerings to be made by the Company.

         Limited Brands is a guarantor of our obligations under our real
property leases for eight of our stores: (1) Woodbury, Minnesota store, (2)
Minnetonka, Minnesota store, (3) Dublin, Ohio store, (4) Schaumburg, Illinois
store, (5) Buford, Georgia store, (6) Atlanta, Georgia store, (7) Castleton,
Indiana store, and (8) Gaithersburg, Maryland store. We have agreed to reimburse
Limited Brands for any amounts that they may be required to pay under these
guarantees. To date, they have made no payments.
     We paid

         In December 2003, we acquired from an affiliate of Limited Brands
$150,000approximately 37 acres of land that is adjacent to our distribution center in
Plainfield, Indiana for recruitinga purchase price of approximately $2.2 million. The
price was based upon an independent appraisal, with a reduction from the
appraised price to reflect costs savings to Limited Brands associated with its search for a replacement for C. David Zoba, whom we hired from Limited Brands as our executive vice president, general counsel and secretary.
Certain Agreements and Arrangements with Directors
not
having to pay brokerage fees.

CERTAIN AGREEMENTS AND ARRANGEMENTS WITH DIRECTORS

         Mr. Starrett, who is a consultant to Freeman Spogli & Co., and Mr. Matthews havehas a verbal
consulting agreementsagreement with us, under which we pay themhim $50,000 and $100,000 per year, respectively, for theirhis
consulting services. Either party can terminate these agreementsthis agreement at any time.


                                       34
                                     

         From August 1999 until May 2003, we had a consulting agreement with Mr.
Matthews under which we paid him $100,000 per year. In fiscal 2003, we paid Mr.
Matthews $25,000 for the period of services prior to the May 2003 termination of
such consulting agreement. In August 2000, we soldloaned Mr. Matthews $75,000 in
connection with his purchase from us of 10,000 shares of our common stock, to Mr. Matthews for an aggregate purchase price of $100,000, $75,000 of which we loaned to him to finance the purchase. The fair value of our common stock at the time of this sale as determined by our Board of Directors was $15.00 per share. In fiscal 2002, we paid Mr. Matthews $48,170 to reimburse the taxes owed by him as a result of our issuance to him of shares below their fair value. With respect to the loan of $75,000,and
Mr. Matthews issued to us a full recourse promissory note for the amount
borrowed. The note bearsborrowed, bearing simple interest at 7.5% per annum and is secured by the
additional shares of common stock. Accrued interest is payable in arrears on March 31 of each year commencing March 31, 2001 andMr. Matthews repaid the principal balance of, andborrowed amount
(together with all accrued and unpaid interest on, the note is due and payable on August 15, 2005. As ofinterest) in full in March 31, 2003, the outstanding principal balance plus accrued interest due from2004. Mr. Matthews was $76,386.99.
is a
consultant to Freeman Spogli & Co.

         In addition, on May 29, 2002,30, 2003, we granted Mr. Matthews 15,000 options to
purchase our common stock at an exercise price of $20.64$13.66 per share.


         None of our executive officers serves on the Compensation Committeecompensation committee or
Boardboard of Directorsdirectors of any other company on which any of the members of our
Compensation Committee or any of our directors is an executive officer.
21
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
This section of the proxy statement will not be deemed to be incorporated by reference by any general statement incorporating this proxy statement into any of our filings under the Securities Act of

         THIS SECTION OF THE PROXY STATEMENT WILL NOT BE DEEMED TO BE
INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING THIS PROXY
STATEMENT INTO ANY OF OUR FILINGS UNDER THE SECURITIES ACT OF 1933 or the Securities Exchange Act ofOR THE
SECURITIES EXCHANGE ACT OF 1934, except to the extent we specifically incorporate this information by reference, and will not otherwise be deemed “filed” under either such Acts.
EXCEPT TO THE EXTENT WE SPECIFICALLY
INCORPORATE THIS INFORMATION BY REFERENCE, AND WILL NOT OTHERWISE BE DEEMED
"FILED" UNDER EITHER SUCH ACTS.

         Our Audit Committee is comprised of Byron E. Allumbaugh, George R.
Mrkonic, Jr. and Stephanie M. Shern (Chair), although effective as of the Annual Meeting of Shareholders, Ms. Shern is retiring as a director and will no longer serve on the Audit Committee.Michael Goldstein (Chairman). Each of the members of the Audit
Committee is independent as defined under the listing standards of the Nasdaq
National Market,Market. The Board of Directors of the Company has determined that
Michael Goldstein, Chair of the Audit Committee, is an audit committee financial
expert as defined by Item 401(h) of Regulation S-K of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and is independent within the
committeemeaning of Item 7(d)(3)(iv) of Schedule 14A of the Exchange Act. The Committee
operates under a revised written charter adopted by our Board by unanimous written consent on April 15, 2003March 9, 2004
and attached to this proxy statement as AppendixAPPENDIX A. The Audit Committee appoints
our independent accountants.
     Galyan’s

         Galyan's management is responsible for preparing our financial
statements, internal controls and financial reporting process. Galyan’sGalyan's
independent accountants, Deloitte & Touche LLP, are responsible for performing
an independent audit of our consolidated financial statements in accordance with
generally accepted auditing standards and for issuing a report thereon. The
Audit Committee’sCommittee's responsibility is to monitor and oversee these processes. The
members of the Audit Committee are not professionally engaged in the practice of
auditing or accounting and are not experts in the fields of accounting or
auditing, including in respect of auditor independence. It is not the Audit
Committee’sCommittee's duty or responsibility to conduct auditing or accounting reviews or
procedures. Therefore, the Audit Committee has relied, without independent
verification, on management’smanagement's representation that the financial statements have
been prepared with the integrity and objectivity and in conformity with
generally accepted accounting principles and on the representations of the
independent accountants included in their report on Galyan’sGalyan's consolidated
financial statements. Furthermore, the Audit Committee’sCommittee's considerations and
discussions with management and the independent accountants do not assure that
Galyan’sGalyan's consolidated financial statements are presented in accordance with
generally accepted accounting principles, that the audit of Galyan’sGalyan's
consolidated financial statements has been carried out in accordance with
generally accepted auditing standards, or that the independent accountants are
in fact “independent.”
"independent."


                                       35
                                     


         The Audit Committee has reviewed and discussed the consolidated
financial statements with management and the independent accountants, including
a discussion of the quality, not just the acceptability, of the accounting
principles, the reasonableness of significant judgments and the clarity of
disclosures in the financial statements. The Audit Committee discussed with the
independent accountants matters required to be discussed by the Statement on
Auditing Standards No. 61 (Communication with Audit Committees), as amended by
Statement on Auditing Standards No. 89 (Audit Adjustments) and Statement on
Auditing Standards No. 90 (Audit Committee Communications). Our independent
accountants also provided to the Audit Committee the written disclosures and the
letter required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees), and the Audit Committee discussed with the
independent accountants that firm’sfirm's independence.


         Based on the reviews and discussions mentioned above and the report of
the independent accountants to the Audit Committee, and subject to the
limitations on the role and responsibilities of the Audit Committee referred to
above, the Audit Committee, exercising its business judgment, recommended to our
Board that the audited consolidated financial statements be included in our
Annual Report on Form 10-K for the year ended February 1, 2003,January 31, 2004, filed with the
Securities and Exchange Commission.
Submitted by the Audit Committee

Stephanie M. Shern, Chair
Byron E. Allumbaugh
George R. Mrkonic, Jr.
22


                                         Submitted by the Audit Committee

                                         Michael Goldstein, Chairman
                                         Byron E. Allumbaugh
                                         George R. Mrkonic, Jr.



                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Freeman Spogli, Limited Brands and Certain Directors


TRANSACTIONS WITH FREEMAN SPOGLI, LIMITED BRANDS AND CERTAIN DIRECTORS

         See “Compensation"Compensation Committee Interlocks and Insider Participation”Participation" and
“Information"Information Regarding Certain Directorships and Voting Arrangements”Arrangements" above for
descriptions of certain transactions and relationships between us and Freeman
Spogli and Limited Brands or one or more of their respective affiliates, and
certain members of our Board of Directors.
Stock Sales to Executive Officers and Directors Prior to Our Initial Public Offering


STOCK SALES TO EXECUTIVE OFFICERS AND DIRECTORS PRIOR TO OUR INITIAL PUBLIC
OFFERING

         In October 1999, several executive officers purchased shares of our common stock. Specifically, Dennis J. Feldmann, Joan M. Hurley, Charles F. Nelson, David M. Pritchett and Lindsay J. Rice purchased 10,000, 15,000, 25,000,
11,000 and 10,000 shares of common stock, respectively, for a purchase price of
$100,000, $150,000, $250,000, $110,000 and $100,000 respectively, and we lent them $40,000, $50,000, $50,000, $50,000 and $50,000,
respectively, to finance the purchase of a portion of these shares. Each person
issued to us a full recourse promissory note for the amount borrowed. Each note
bears simple interest at 7.5% per annum and accrued interest is payable in
arrears on March 31 of each year commencing on March 31, 2000. The principal
balance of, and all accrued and unpaid interest on, each note is due and payable
on October 15, 2004. The notes are secured by shares of common stock owned by
these individuals. In June 2002, Mr. Feldmann repaid the borrowed amount (together with all accrued interest) in full. As of March 31, 2003,2004, after reflecting payments for accrued
interest for the period ending December 31, 2002,2003, the outstanding principal
balance plus accrued interest due from Hurley, Nelson,each of Messrs. Pritchett and Rice was
approximately $50,925, $50,925, $50,925 and $50,925, respectively.
$50,938.


                                       36
                                     

         In May 2001, C. David Zoba purchased 30,000 shares of common stock at
$19.00 per share, which represented the fair value of the shares at that time,
for a purchase price of $570,000. We loaned $285,000 to Mr. Zoba to finance the
purchase of a portion of those shares. Mr. Zoba issued to us a full recourse
promissory note for the amount borrowed. The note bearsborrowed, bearing simple interest at 7.5% per
year and is secured by his shares of common stock. In February 2003, Mr. Zoba
repaid the borrowed amount (together with all accrued interest) in full.


AGREEMENTS WITH EXECUTIVE OFFICERS

         See "Employment Agreements and Other Arrangements" above for a
description of certain agreements we have entered into with certain of named
executive officers.

         In addition to those agreements, we entered into an employment
agreement with each of Jeffrey R. Brown, Lindsay J. Rice and Edward J. Brett on
December 12, 2003, December 12, 2003 and January 20, 2004, respectively. Each of
those agreements provides for a term of two years, with an automatic day-by-day
renewal beginning after the first anniversary, so that there is always a one
year term remaining under the agreement. The initial base salary for the
executive under each of the agreements is $265,000, and is to be adjusted under
the Company's normal salary review procedures. Each executive is also eligible
to receive a target bonus equal to 35% of his base salary if we achieve certain
financial objectives. The target bonus can be increased by an uncapped,
additional amount if we exceed our targeted financial objectives by an amount
determined by our Board of Directors. Because we did not achieve our financial
objectives for 2003, none of the executives received a target bonus for fiscal
2003. Each executive is also eligible under his agreement to receive an annual
grant of stock options pursuant to our 1999 Stock Option Plan. If the executive
is terminated by us without cause or by the executive for good reason, he will
be entitled to receive all earned but unpaid salary and benefits as of the date
of termination and the annual bonus, if any, for that fiscal year based upon the
Company's actual performance and paid consistent with the administration of the
Company's regular annual bonus program. In addition, he will receive severance
pay constituting the continuation of his then current base salary and health
coverage and a payment equal to what he would have received under our retirement
plans for the longer of one year from the date of termination of his employment
or two years from the date of the agreement. In the event of a change in control
of the Company, unvested options previously granted to the executive will
immediately become vested on the date of such change of control. Each executive
also agreed to be bound by non-competition and non-hire provisions that apply
until the first anniversary of termination of his employment.

         In June 2003, we entered into a separation agreement with Joan M.
Hurley, formerly our Senior Vice President, Communications and Community
Relations, under which we agreed to pay Ms. Hurley her annual base salary of
$160,000 per year during a one-year period, with potential reduction for income
earned by her from third parties, and some excess benefits costs, in exchange
for a release from Ms. Hurley of any potential claims and an agreement by her
not to compete with us or solicit for hire any of our employees during the one
year period.

             SECTION 16(a)16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE


         Section 16(a) of the Exchange Act and SEC regulations require our
directors, certain officers and persons who own more than 10% of a registered
class of our equity securities to file reports of ownership and changes in
ownership with the SEC and NASDAQ. These persons are required by SEC regulation
to furnish us with copies of all Section 16(a) forms they file. Based solely on
our review of the copies of such reports that we received, and on written
representations from certain reporting persons, we believe that, all Section 16(a)other than a
late Form 4 filing requirements applicable toby each of Messrs. Allumbaugh, Belatti, Mang and Mrkonic, our
directors, officers and greater than 10% beneficial owners were complied with all
applicable Section 16(a) filing requirements during 2002 except as follows. In September 2002, we granted stock options to each of our non-employee directors. Messrs. Allumbaugh, Belatti, and Mrkonic and Ms. Shern each filed a single late Form 4 to report their receipt of these options. In addition, each of Messrs. Feldmann and Wagner filed a single late Form 4 to report one discretionary transaction under our 401(k) plan.
fiscal 2003.


                                       37
                                     INDEPENDENT PUBLIC ACCOUNTANTS


         Our Audit Committee of the Board of Directors has appointed Deloitte &
Touche LLP as our independent public accountants for fiscal year 2003.2004. Deloitte
& Touche LLP has served as our independent public accountants since 1999.
Services provided to us by Deloitte & Touche LLP in fiscal 20022003 included the
audit of our consolidated financial statements for the year ended February 1, 2003,January 31,
2004, limited reviews of quarterly reports, services related to filings with the
Securities and Exchange Commission, including relating to our initial public offering, and consultations on various tax matters.


         We expect representatives of Deloitte & Touche LLP to be at the Annual
Meeting and to be available to respond to appropriate questions from
shareholders. We will give the Deloitte & Touche LLP representatives an
opportunity to make a statement if they desire.
23


FEES PAID TO INDEPENDENT AUDITORS

         AUDIT FEES. The following table sets forth theaggregate fees billed to usfor audit services rendered by
         Deloitte & Touche LLP in 2003 and 2002 totaled approximately $270,000
         and $232,000, respectively. Services rendered in this category
         consisted of:

         o  audits of the consolidated financial statements;

         o  reviews of the consolidated financial statements included in the
            Company's Quarterly Reports on Form 10-Q;

         o  professional services rendered in connection with a consent included
            in Form S-8 filing for hiring of President and Chief Operating
            Officer;

         o  professional services rendered in connection with a consent included
            in Form S-8 filing for establishment of an employee stock purchase
            plan; and

         o  services associated with periodic reports and other documents filed
            with the Securities and Exchange Commission.

         AUDIT-RELATED FEES. The aggregate fees billed in 2003 and 2002 for
         assurance and related services by Deloitte & Touche LLP that are
         reasonably related to the performance of the audit or review of the
         Company's financial statements totaled approximately $147,000 and
         $14,000, respectively. Services rendered in this category consisted
         primarily of:

         o  internal control reviews;

         o  Section 404 readiness consultation; and

         o  financial statement audits of employee benefit plans.

         TAX FEES. The aggregate fees billed in 2003 and 2002 for professional
         services rendered by Deloitte & Touche LLP for the fiscal year ended February 1, 2003:
Audit Fees
$
200,000
Financial Information Systems Design and Implementation Fees
$
0
All Other Fees
$
183,000
     The amounts shown above include out-of-pocket expenses incurred by Deloittetax compliance, tax
         advice and Touche LLPtax planning totaled approximately $113,000 and $138,000,
         respectively. Services rendered in connection with the provision of such services. The amount shown for “Audit Fees” includes fees relating to thethis category consisted primarily
         of:


                                       38
                                     


         o  tax planning and other non-compliance consultation, including tax
            audit of our financial statements for the year ended February 1, 2003 and also includes fees relating to quarterly reviews of financial statements, including the Forms 10-Q for the three month periods ended May 4, 2002, August 3, 2002 and November 2, 2002. The amount shown for “All Other Fees” also includes fees relating to
$69,000 forassistance;

         o  professional services rendered in connection with the establishment
            of a new wholly owned subsidiary;

         o  sale leaseback accounting review;

         o  tax compliance and

$73,000 ruling requests, including federal and state tax
            return preparation; and

         o  advice and assistance in implementing a change in accounting method
            for tax return compliance, advice and consultation.
purposes of Internal Revenue Service regulations related to
            uniform capitalization costs of inventory.


         The Audit Committee approves all audit-related and non-audit related
services, and does not delegate these responsibilities except that pre-approval
of non-audit services may be delegated to a single member of the Audit
Committee. In fiscal 2003, the Audit Committee pre-approved Deloitte and Touche
LLP's provision of all non-audit services, and determined that Deloitte and
Touche LLP’sLLP's provision of the non-audit services generating “All Other Fees” is compatible with maintaining
Deloitte and Touche LLP’sLLP's independence.
OTHER MATTERS


         The Board of Directors is not aware of any other matters to be
presented at the Annual Meeting. If other matters properly come before the
Annual Meeting, the proxies will be voted in accordance with the judgment of the
persons voting.
BY ORDER OF THE BOARD OF DIRECTORS

C. David Zoba
Executive Vice President,
General Counsel and Secretary


                                        BY ORDER OF THE BOARD OF DIRECTORS

                                        /S/ C. DAVID ZOBA

                                        C. David Zoba
                                        EXECUTIVE VICE PRESIDENT,
                                        GENERAL COUNSEL AND SECRETARY

Plainfield, Indiana
Dated:  April 25, 2003
24
30, 2004


                                       39
                                     
APPENDIX A—
GALYAN’SA

                         GALYAN'S TRADING COMPANY, INC.
AUDIT COMMITTEE CHARTER
A. Name
NAME

         There shall be a committee of the Board which shall be called the Audit
Committee.
B. Purpose
PURPOSE

         The Audit Committee shall be directly responsible for the appointment,
compensation and oversight over the work of the Company’sCompany's public accountants.


         The Audit Committee shall monitor (1) the integrity of the financial
statements of the Company and of the Company’sCompany's systems of internal accounting
and financial controls, (2) the Company’sCompany's compliance with legal and regulatory
requirements, (3) the public accountants’accountants' qualifications and independence, (4)
the performance of the Company’sCompany's public accountants and (5) the establishment
and performance of the Company’sCompany's internal audit functions.


         The Audit Committee shall prepare the report required by the rules of
the Securities and Exchange Commission to be included in the Company’sCompany's annual
proxy statement. The Audit Committee Charter shall be included as an appendix to
the Company’sCompany's proxy statement at least once every three years.
C. Committee Membership
COMMITTEE MEMBERSHIP

         The Audit Committee shall consist of no fewer than three members. Each
member of the Audit Committee shall satisfy the independence, experience and
financial expertise requirements of the NASDAQ and Section 10A of the Securities
Exchange Act of 1934, as amended by the Sarbanes-Oxley Act of 2002, and the
rules promulgated thereunder. Director’sDirector's fees are the only compensation that an
Audit Committee member may receive from the Company.


         The Board shall appoint the members of the Audit Committee annually,
considering the recommendation of the Nominating and Corporate Governance
Committee, and further considering the views of the Chairman of the Board and
the Chief Executive Officer, as appropriate. The members of the Audit Committee
shall serve until their successors are appointed and qualify, and shall
designate the Chairperson of the Audit Committee. The Board shall have the power
at any time to change the membership of the Audit Committee and to fill
vacancies in it, subject to such new member(s) satisfying the independence,
experience and financial expertise requirements referred to above. Except as
expressly provided in this Charter or the by-laws of the Company or the
Corporate Governance Guidelines of the Company, or as otherwise provided by law
or the rules of the NASDAQ, the Audit Committee shall fix its own rules of
procedure.



                                       A-1
                                     D. Committee Authority and Responsibilities
COMMITTEE AUTHORITY AND RESPONSIBILITIES

         The Audit Committee shall have the sole authority to appoint or replace
the public accountants and shall approve all audit engagement fees and terms and
all non-audit engagements with the public accountants. The Audit Committee shall
consult with management but shall not delegate these responsibilities, except
that pre-approvals of non-audit services may be delegated to a single member of
the Audit Committee. In its capacity as a committee of the Board, the Audit
Committee shall be directly responsible for the oversight of the work of the
public accounting firm (including resolution of disagreements between management
and the public accounting firm regarding financial reporting) for the purpose of
preparing or issuing an audit report or related work, and the public accounting
firm shall report directly to the Audit Committee.


         The Audit Committee shall have the authority, to the extent it deems
necessary or appropriate, to retain special legal, accounting or other
consultants to advise the committee and carry out its duties, and to conduct or
authorize investigations into any matters within its scope of responsibilities.
The Audit Committee shall meet periodically with management, the internal
auditors and the public accountants in separate executive sessions in
furtherance of its purposes. The Audit Committee may request any officer or
employee of the Company or the Company’s
A-1
Company's outside counsel or public accountants
to attend a meeting of the Audit Committee or to meet with any members of, or
consultants to, the Audit Committee.


         The Audit Committee shall make regular reports to the Board. The Audit
Committee shall review and reassess the adequacy of this Charter annually and
recommend any proposed changes to the Board for approval. The Audit Committee
shall annually review the Audit Committee’sCommittee's own performance.


         In performing its functions, the Audit Committee shall undertake those
tasks and responsibilities that, in its judgment, would most effectively
contribute and implement the purposes of the Audit Committee. The following
functions are some of the common recurring activities of the Audit Committee in
carrying out its oversight responsibility:


         o  Review and discuss with management and the public accountants the
            Company’sCompany's annual audited financial statements, including disclosures
            made in “Management’s"Management's Discussion and Analysis of Financial Condition
            and Results of Operations,”" and the matters required to be discussed
            pursuant to Statement on Auditing Standards No. 61, and recommend to
            the Board whether the audited financial statements should be
            included in the Company’sCompany's Form 10-K.



         o  Review and discuss with management and the public accountants the
            Company’sCompany's quarterly financial statements, including disclosures made
            under “Management’s"Management's Discussion and Analysis of Financial Condition
            and Results of Operations”Operations" or similar disclosures, and the matters
            required to be discussed pursuant to Statement on Auditing Standards
            No. 61, prior to the filing of its Form 10-Q, including the results
            of the public accountants’accountants' reviews of the quarterly financial
            statements to the extent applicable.



         o  Review and discuss with management and the public accountants, as
            applicable, (a) major issues regarding accounting principles and
            financial statement presentations, including any significant changes
            in the Company’sCompany's selection or application of accounting principles,
            and major issues as to the adequacy of the Company’sCompany's internal


                                       A-2
                                     


         controls and any special audit steps adopted in light of material
         control deficiencies;(b)analyses prepared by management or the public
         accountants setting forth significant financial reporting issues and
         judgments made in connection with the preparation of the financial
         statements, including analyses of the effects of alternative GAAP
         methods on the financial statements; (c) any management letter provided
         by the public accountants and the Company’sCompany's response to that letter;
         (d) any problems, difficulties or differences encountered in the course
         of the audit work, including any disagreements with management or
         restrictions on the scope of the public accountants’accountants' activities or on
         access to requested information and management’smanagement's response thereto; (e)
         the effect of regulatory and accounting initiatives, as well as
         off-balance sheet structures, on the financial statements of the
         Company; and (f) earnings press releases (paying particular attention
         to any use of “proforma”"proforma" or “adjusted”"adjusted" non-GAAP, information), as well
         as financial information and earnings guidance (generally or on a
         case-by-case basis) provided to analysts and rating agencies.



         o  Discuss with management the Company’sCompany's major financial risk exposures
            and the steps management has taken to monitor and control such
            exposures, including the Company’sCompany's risk assessment and risk
            management policies.



         o  Obtain and review a report from the public accountants at least
            annually regarding all relationships between the public accountants
            and the Company. Evaluate the qualifications, performance and
            independence of the public accountants, including a review and
            evaluation of the lead partner of the registered public accountant
            and taking into account the opinions of management and the Company’sCompany's
            internal auditors.



         o  Ensure that the lead audit partner of the public accountants and the
            audit partner responsible for reviewing the audit are rotated at
            least every five years as required by the Sarbanes-Oxley Act of
            2002.



         o  Recommend to the Board policies for the Company’sCompany's hiring of
            employees or former employees of the public accountants who were
            engaged on the Company’sCompany's account (recognizing that the
            Sarbanes-Oxley Act of 2002 does not permit the CEO, controller, CFO
            or chief accounting officer to have participated in the Company’sCompany's
            audit as an employee of the public accountants during the preceding
            one-year period).
A-2


         o  Discuss with the public accountants any communications between the
            audit team and the audit firm’sfirm's national office respecting auditing
            or accounting issues presented by the engagement.



         o  Discuss with management and the public accountants any accounting
            adjustments that were noted or proposed by the registered public
            accountants but were passed (as immaterial or otherwise).



         o  Discuss with the public accountants the internal audit function and
            the audit plan responsibilities, budget and staffing.



         o  Establish procedures for (a) the receipt, retention and treatment of
            complaints received by the Company regarding accounting, internal
            accounting controls or auditing matters and (b) the confidential,
            anonymous submission by employees of the Company of concerns
            regarding questionable accounting or auditing matters.




                                       A-3
                                     



         o  Review disclosures made by the Company’sCompany's principal executive officer
            or officers and principal financial officer or officers regarding
            compliance with their certification obligations as required under
            the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder,
            including the Company’sCompany's disclosure controls and procedures and
            internal controls for financial reporting and evaluations thereof.



         o  Review any reports of the public accountants mandated by Section 10A
            of the Securities Exchange Act of 1934, as amended, and obtain from
            the public accountants any information with respect to illegal acts
            in accordance with Section 10A.



         o  Review and approve the Audit Committee report required to be
            included in the Company’sCompany's annual proxy statement.



         o  Ensure that the Company establishes and maintains an internal audit
            function.



         o  Determine that management has established, reviewed and updated
            periodically an Ethics Policy, particularly with regard to senior
            management. Recommend to the Board proposed modifications, if any,
            to the Company's Ethics Policy, and consider any request for waivers
            of the Company's Ethics Policy in respect of any of the Company's
            executive officers. The Company shall make disclosure of any waivers
            required by (and in accordance with) applicable law and listing
            standards.

         o  Review and approve all related-party transactions.



         o  Review with the Company’sCompany's general counsel legal or regulatory
            matters that may have a material impact on the Company’sCompany's financial
            statements or its compliance or reporting policies.
Limitations of Audit Committee’s Roles


E. LIMITATIONS OF AUDIT COMMITTEE'S ROLES

         While the Audit Committee has the responsibilities and powers set forth
in its Charter, it is not the duty of the Audit Committee to prepare financial
statements, plan or conduct audits or to determine that the Company’sCompany'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 management and the registered public
accountants.
A-3



Adopted on March 9, 2004.

                                       A-4
                                     

GALYAN’S TRADING COMPANY, INC.
ATTN: LEGAL DEPARTMENT
2437 EAST MAIN STREET
PLAINFIELD, INDIANA 46168
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site. You will be prompted to enter your 12-digit Control Number which is located below to obtain your records and to create an electronic voting instruction form.

VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call. You will be prompted to enter your 12-digit Control Number which is located below and then follow the simple instructions the Vote Voice provides you.

VOTE BY MAIL -
Mark, sign, and date your proxy card and return it in the postage-paid envelope we have provided or return it to Galyan’s Trading Company, Inc., c/o ADP, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
GALYAN
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
GALYAN’S TRADING COMPANY, INC.


1.     
Vote on Directors

To elect twelve directors.

01) Robert B. Mang
02) Norman S. Matthews
03) Byron E. Allumbaugh
04) Frank J. Belatti
05) Stuart B. Burgdoerfer
06) Timothy J. Faber




07) Michael Goldstein
08) Todd W. Halloran
09) George R. Mrkonic, Jr.
10) John M. Roth
11) Ronald P. Spogli
12) Peter Starrett
For
All

|_|
Withhold
All

|_|
For All
Except

|_|
To withhold authority to vote, mark “For All Except”
and write the nominee's number on the line below.
In their discretion the Proxies are authorized to vote upon such other business as may properly come before the meeting.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” EACH OF THE NOMINEES FOR DIRECTOR. THIS PROXY ALSO GRANTS TO THE PROXYHOLDERS THE DISCRETION TO VOTE THE PROXIES ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF.

Please sign exactly as your name appears hereon. One joint owner may sign on behalf

                                   APPENDIX B

                         GALYAN'S TRADING COMPANY, INC.
                   NOMINATING AND GOVERNANCE COMMITTEE CHARTER



A.  NAME

         There shall be a committee of the Board, which shall be called the
Nominating & Governance Committee.

B.  PURPOSE

         The Nominating & Governance Committee shall (1) identify individuals
qualified to become Board members, and recommended that the Board select the
director nominees for the next annual meeting of shareholders; and (2) develop
and recommend to the Board the Corporate Governance Guidelines applicable to the
Company.

C.  COMMITTEE MEMBERSHIP AND PROCEDURES

         The Nominating & Governance Committee shall consist of no fewer than
two members. The Board shall appoint the members of the Nominating & Governance
Committee. The members of the Nominating & Governance Committee shall serve
until their successors are appointed and qualify, and shall designate the
Chairman of the Nominating & Governance Committee. The Board shall have the
power at any time to change the membership of the Nominating & Governance
Committee and to fill vacancies in it, subject to such new member (s) satisfying
the independence requirements established by NASDAQ (if, and to the extent, such
NASDAQ independence rules apply to the Company). Except as expressly provided in
this Charter, the by-laws of the others. When signing as executor, administrator, attorney, trustee, guardian, etc., please give your full title.
Signature [PLEASE SIGN WITHIN BOX]               Date
Signature (Joint Owners)                Date
Galyan’s Trading Company or the Corporate Governance Guidelines
of the Company, the Nominating & Governance Committee shall fix its own rules of
procedure.

D.  COMMITTEE AUTHORITY AND RESPONSIBILITIES

         o  The Nominating & Governance Committee shall develop qualification
            criteria for Board members, and actively seek, interview and screen
            individuals qualified to become Board members for recommendation to
            the Board in accordance with the Corporate Governance Guidelines.
            The Nominating & Governance Committee shall take into account the
            obligations of the Company under the Stockholders Agreement dated as
            of August 31, 1999, as amended, (the "Stockholders Agreement"),
            among FS Equity Partners IV, L.P., G Trademark, Inc.
2437 East Main Street
Plainfield, Indiana 46168
Dear Shareholder:
, The Limited,
            Inc. and the Company.

         o  The Nominating & Governance Committee shall have the sole authority
            to retain and terminate any search firm to be used to identify
            director candidates and shall have sole authority to approve the
            search firm's fees and other retention terms. The Nominating &
            Governance Committee shall also have authority to obtain advice and
            assistance from internal or external legal, accounting or other
            advisors.


                                       B-1
                                     



         o  The Nominating & Governance Committee shall oversee the evaluation
            of the executive management of the Company and make recommendations
            to the Board as appropriate.

         o  The Nominating & Governance Committee shall review and reassess at
            least annually the adequacy of the Corporate Governance Guidelines
            of the Company and recommend any proposed changes to the Board for
            approval.

         o  The Nominating & Governance Committee shall make regular reports to
            the Board.

         o  The Nominating & Governance Committee shall serve in an advisory
            capacity to the Board and Chairman of the Board on matters of
            organizational and governance structure of the Company and the
            conduct of the Board.

         o  The Nominating & Governance Committee shall review and reassess the
            adequacy of this Charter annually and recommend any proposed changes
            to the Board for approval. The Nominating & Governance Committee
            shall annually review its own performance.

         o  Subject to the provisions and obligations in the Stockholders
            Agreement, the Nominating & Governance Committee shall review
            annually, or more often if appropriate, the directors who are
            members (including qualifications and requirements), structure
            (including authority to delegate) and performance of committees of
            the Board (including reporting to the Board), and make
            recommendations to the Board, as appropriate.

         o  The Nominating & Governance Committee shall receive comments from
            all directors and report annually to the Board with an assessment of
            the Board's performance, to be discussed with the full Board
            following the end of each fiscal year.

         o  Subject to the provisions and obligations in the Stockholders
            Agreement, the Nominating & Governance Committee shall advise on
            changes in Board compensation.


Adopted on March 9, 2004.

                                       B-2
                                     

                                   APPENDIX C

                         GALYAN'S TRADING COMPANY, INC.
                                  ETHICS POLICY



WHAT WE STAND FOR

         Galyan's desires to promote honest and ethical conduct. Every member of
the Galyan's community - directors, executives, management and Associates - has
a duty to comply with all applicable law and adhere to our standards of business
ethics, as outlined in this Ethics Policy. This Ethics Policy sets forth the
fundamental principles of law and ethics governing the way we do business. The
members of our board of directors are subject to this Ethics Policy, as well as
applicable law and additional guidance relating to their special
responsibilities. All executives, management and Associates are subject to this
Ethics Policy, as well as applicable law and the policies and procedures set
forth in the Galyan's Associate Handbook (revised August 2003), which contains
additional information that supplements this policy.

         Please review these points, and commit to them. They are important to
each of us, and to the business as a whole.

                               COMPLY WITH THE LAW

         While performing your job, you must obey all applicable local, state,
and federal laws and regulations, as well as the applicable laws and regulations
of any foreign country in which we transact business. Also, don't assist others
in taking, and don't allow others to take, actions that would be in violation of
law or this policy. All questions of law should be directed to the General
Counsel of the Company.

               PROTECT COMPANY ASSETS AND CONFIDENTIAL INFORMATION

         Confidential or sensitive information must not be disclosed to any
person (either inside or outside the Company) without a legitimate business
reason. In no event should any confidential information or trade secrets be used
by you for personal benefit or for the benefit of any competitor. As an
Associate of the Company, you are legally required to protect the
confidentiality of our information and trade secrets - even if you are no longer
an Associate.

         You are cordially invitedexpected to attenduse your work time for the Annual Meetingbenefit of Shareholdersthe Company.
Our premises, equipment, documents, data, software, supplies, and support
services are furnished to you to further the Company's business and interests.
Inventions, designs, and innovations that you conceive or devise are assets of
Galyan’sthe Company when they (1) arise out of or are suggested by the Company's
confidential information or trade secrets or any work you performed for the
Company, or (2) result from your use of the Company's time, facilities, or
assets. You are expected to take due care in safeguarding the Company's tangible
and intangible assets against loss or unauthorized use. Misuse of your Associate
discount privileges is also a violation of this policy.


                                       C-1
                                     

                              KEEP ACCURATE RECORDS

         Our books and records must be accurate and complete and fairly reflect
the underlying transactions. All accounting entries must comply with generally
accepted accounting principles and all other accounting policies of the Company.
No document, record, or report should contain misrepresentations, or material
omissions.

                           COMPLY WITH SECURITIES LAWS

         The Company has adopted a policy statement prohibiting trading of any
securities based on inside information. You are expected to be familiar with
this policy and to comply with it in all respects. The Company has also adopted
a Disclosure Policy limiting the number of people who may discuss our Company's
performance with securities analysts and the media. Unless you are a
specifically authorized person, you should not discuss any performance related
matters. If you have not already received these policy statements, you should
request copies from the Human Resources department.

                         COMPLY WITH LAWS ON COMPETITION

         We have full confidence in our ability to succeed and prosper in a free
marketplace. Our competitive advantage is the superiority of our Associates,
merchandise, stores, and services. We don't tolerate illegal restraints of trade
or unfair competition. Don't enter into any discussions or arrangements with
competitors or suppliers that affect competitive pricing, marketing, or labor
practices.

                           AVOID CONFLICTS OF INTEREST

         Don't use your position with the Company to obtain a personal benefit
of any kind. All business decisions must be based on and promote the best
interests of the Company. Avoid any action or relationship that creates a
conflict between the Company's interests and your personal or immediate family's
interests. (An example: having an interest in a non-public Company that competes
or does business with our Company or any of its affiliates.) While the Company
respects your privacy, as well as your right to conduct your personal affairs
without interference, you must make prompt, complete, and continuing disclosure
of all facts relating to any actual or potential conflict in accordance with the
procedures for compliance outlined below. The situation may be allowed to
continue, but only if it is determined not to be detrimental to the interests of
the Company.

                          COOPERATE WITH INVESTIGATIONS

         You must cooperate fully with any inquiry or investigation undertaken
at the Company's direction by its attorneys, investigators, internal auditors,
or independent public accountants.


                                       C-2
                                     


                          WE PROHIBIT CORRUPT PRACTICES

         The U.S. Foreign Corrupt Practices Act prohibits giving anything of
value, directly or indirectly, to foreign government officials or foreign
political candidates in order to obtain or retain business. It is strictly
prohibited to make illegal payments to government officials of any country. In
addition, the U.S. government has a number of laws and regulations regarding
business gratuities which may be accepted by U.S. government personnel. The
promise, offer or delivery to an official or employee of the U.S. government of
a gift, favor or other gratuity in violation of these rules would not only
violate Company policy but could also be a criminal offense. State and local
governments, as well as foreign governments, may have similar rules. The
Company's General Counsel can provide guidance to you in this area.

                            COMPLY WITH CUSTOMS LAWS

         We have a strict policy of complying with all legal requirements
associated with the importation of goods into the United States.

                        BUSINESS ENTERTAINMENT AND GIFTS

         The purpose of business entertainment and gifts in a commercial setting
is to create good will and sound working relationships. No gift or entertainment
should be offered, given, provided or accepted by any Company employee, family
member of an employee or agent unless it: (1) is not a cash gift, (2) is
consistent with customary business practices, (3) is not excessive in value (not
more than $50 unless approved by your General Merchandise Manager or Senior Vice
President), (4) cannot be construed as a bribe or payoff and (5) does not
violate any laws or regulations. Please discuss with your General Merchandise
Manager or Senior Vice President any gifts or proposed gifts which you are not
certain are appropriate.

                     COMPLY WITH LAWS ON POLITICAL ACTIVITY

         Although we encourage the participation of our Associates in the
democratic process, the Company's political activities are strictly regulated by
federal, state, and local laws. The Company's resources should never be used
for, or committed to, any political activity without prior written approval of
the General Counsel of the Company.

      What special obligations apply to Associates with financial reporting
                                responsibilities?

         Because of Galyan's status as a public company, the Chief Executive
Officer and all Associates in the Galyan's finance department are subject to the
following special obligations: (1) act with honesty and integrity, (2) provide
information that is accurate, complete, objective, relevant, timely and
understandable to ensure full, fair, accurate, timely and understandable
disclosure in reports and documents that Galyan's files with, or submits to,
governmental agencies and in other public communications and (3) promptly report
any conduct that the individual believes to be a violation of law or business
ethics or any provision of the Ethics Policy in accordance with the procedures
set forth under the heading "Accounting Complaints" below.


                                       C-3
                                     



              WHAT HAPPENS WHEN THERE'S A VIOLATION OF THIS POLICY?

         All violations of this Ethics Policy - no matter how trivial they may
seem at the time - are harmful to the interests of the Company and will be
treated accordingly. Violations will result in appropriate disciplinary action,
up to and including termination of employment, recovery of damages, and filing
of criminal charges.

                   PROCEDURES FOR COMPLIANCE WITH THIS POLICY

         It is the responsibility of all managers to lead by example, ensuring
that other Associates understand and comply with this policy and fostering an
environment that promotes compliance. It is your responsibility as an Associate
to comply in all respects and also to report any violations committed by others.

         If you have questions or concerns, or want to report known or suspected
         violations, you should:

         1. Contact your supervisor immediately. We have an open-door policy,
            and it encourages you to take all problems to your supervisor for a
            full and frank discussion.

         2. If you are uncomfortable taking the matter to your supervisor, or if
            you are not satisfied with the resolution of the matter at that
            level, contact our Senior Vice President of Human Resources.

         3. If you believe the matter is too sensitive to be handled within your
            department, or if you are not satisfied with the resolution of the
            matter at that level, contact our General Counsel, who is also
            available to all Associates for information and assistance on any
            matter discussed in this policy.

         THE GENERAL COUNSEL CAN BE REACHED AT ONE GALYANS PARKWAY, PLAINFIELD,
         IN 46168

         TOLL FREE TELEPHONE:  888-425-9267 OR FAX 317-532-0269
         EMAIL:  DZOBA@GALYANS.COM

                            WAIVERS FROM THIS POLICY

         We expect that members of the Galyan's community will follow the Ethics
Policy and that waivers will rarely be requested or granted. Waivers can be
granted only by the General Counsel (or a designee of the General Counsel).
Waivers for members of the Board of Directors or executive officers can be
granted only by the Board of Directors and must be promptly disclosed, along
with the reasons for the waiver, in accordance with applicable law and listing
requirements.


                                       C-4
                                     


                                    SPEAK UP!

         If you see something that you think is wrong, don't worry about the
repercussions of sharing it. In no event will you or any Associate be subject to
reprisals, retribution, or any career disadvantage for complying with the
reporting or other requirements of this policy. All inquiries, as well as the
identity of reporting Associates, will be kept confidential (except in instances
where the Company is required to reveal information in order to enforce this
policy or by applicable law or judicial process). Of course, false reporting of
violations -- when done knowingly or recklessly - will not be tolerated; but if
you have actual knowledge of or a reasonable basis for suspecting a violation,
you should err on the side of making the report.

                              ACCOUNTING COMPLAINTS

         The Company's policy is to comply with all applicable financial
reporting and accounting regulations applicable to the Company. If any employee,
officer or director of the Company has concerns or complaints regarding
questionable accounting or auditing matters of the Company, then he or she is
encouraged to submit those concerns or complaints (anonymously and
confidentially) to the Audit Committee of the Board of Directors (which will,
subject to its duties arising under applicable law, regulations and legal
proceedings, treat such submissions confidentially). The Company has engaged an
independent, third party to give you assurance that your concerns or complaints
can be submitted anonymously and confidentially. You may report any concerns
regarding the Company's internal accounting controls or auditing matters by
calling toll free 1-866-537-4591, or online at HTTP://WWW.OPENBOARD.INFO/GLYN/
or by email at GLYN@OPENBOARD.INFO to leave a confidential and anonymous message
with our Audit Committee.



Adopted on March 9, 2004.


                                       C-5
                                     


                                   APPENDIX D

                         GALYAN'S TRADING COMPANY, INC.
                           2004 STOCK OPTION AGREEMENT

         THIS STOCK OPTION AGREEMENT ("Agreement") is entered into as of March
1, 2004, by and between Galyan's Trading Company, Inc., which willan Indiana corporation
("Company"), and Edwin J. Holman ("Optionee").

                                 R E C I T A L S

         A. Optionee is employed by the Company pursuant to an Amended
Employment Agreement dated August 29, 2003 ("Employment Agreement").

         B. Company has determined to grant Optionee the right to purchase
shares of common stock of the Company pursuant to the terms of this Agreement.

         C. The Options (as hereinafter defined) granted pursuant to this
Agreement are not granted pursuant to any plan and shall be heldsubject to approval
by Company's shareholders at The Westin Hotel, 50 South Capitol Avenue, Indianapolis, Indiana 46204, on Thursday,Company's next annual meeting scheduled for May 15, 2003,21,
2004 (the "Annual Meeting"). Nevertheless, except as provided herein, such
Options shall be subject to the same terms and conditions as if they had been
granted pursuant to the Galyan's Trading Company, Inc. 1999 Stock Option Plan,
as amended ("Plan").

                                A G R E E M E N T

         NOW, THEREFORE, in consideration of the covenants hereinafter set
         forth, the parties agree as follows:

1. OPTIONS; NUMBER OF SHARES.

         (a) Subject only to approval by Company's shareholders at 9:00 a.m. local time.
     At the Annual
Meeting, holdersCompany hereby grants to Optionee the right to purchase (each an
"Option" and collectively, the "Options") up to 100,000 shares of common stock,
will vote uponno par value, of the election of twelve directors. The attached proxy statement contains information about this and other matters pertainingCompany ("Common Stock" or "Shares") at a per share price
("Purchase Price") equal to the Annual Meeting.
     Whetherclosing price of Common Stock on the date hereof
($8.74).

         (b) Although the Options are not issued pursuant to the Plan, the
Options and the right to purchase all or any portion of the Shares are subject
to the terms and conditions stated in this Agreement and in the Plan, as if such
Options had been granted pursuant to the Plan. Upon exercise of an Option and
payment of the Purchase Price, Optionee shall become a shareholder of the
Company, with all rights and privileges of a shareholder of the Company in
respect of any Shares issuable upon such exercise. It is intended that the
Options will not you planqualify for treatment as an incentive stock option under
Section 422 of the Internal Revenue Code of 1986, as amended ("Code").

2. EXERCISE CRITERIA.

         (a) Unless vesting of the Options is accelerated pursuant to attend, you can ensureSubsection
(b), one-third of the Options shall become vested on each of the first three
anniversaries of the date hereof, provided Optionee is employed by Company on
such anniversary date.

         (b) Upon a Change in Control (as defined in Section 7 of the Employment
Agreement), all outstanding Options shall become 100% vested.


                                       D-1
                                     


         (c) If the Plan and the outstanding Options terminate pursuant to
Section 13(b) of the Plan (with no substitution, assumption, settlement, or
other continuation), and ten days' notice referred to in Section 13(b) is
required to be given to Optionee (or would be required to be given to Optionee
if his Options were vested on such date), all of the Options shall become vested
as of the date preceding such notice, and Optionee shall have the exercise
rights specified in Section 13(d) with respect to all outstanding Options.

3. TERMINATION OF OPTIONS. The Options and Optionee's right to exercise the
Options shall terminate on the expiration of seven (7) years from the date
hereof, unless terminated earlier pursuant to Section 4 hereof or the Plan
(including, without limitation, Section 13(b) of the Plan).

4. EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH.

         (a) If the Company terminates Optionee's employment for Cause (as
defined in Section 4(a) of the Employment Agreement), or Optionee resigns for
other than Good Reason or Special Resignation pursuant to Section 4(e) or 4(f)
of the Employment Agreement, Optionee's right to exercise any outstanding
Options shall terminate immediately upon his termination of employment.

         (b) If Optionee's employment terminates during the term of the
Employment Agreement pursuant to Section 4(b), (c), (d), (e), or (f), Optionee
(or, Optionee's estate, in case of his death) may exercise any or all of his out
standing vested Options at any time before the earlier of (i) the first
anniversary of his termination of employment or (ii) the date on which his right
to exercise such vested Options would have terminated if he had not terminated
employment.

         (c) If Optionee's employment terminates for a reason other than as
provided in Subsection (a) or (b) above, Optionee (or his estate, in case of his
death) may exercise any or all of his outstanding vested Options at any time
before the earlier of (i) 90 days after his termination of employment date or
(ii) the date on which his right to exercise such vested Options would have
terminated if he had not terminated employment.

5. TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP. The termination of
Optionee's employment shall not accelerate the vesting of the Options. The
Options may be exercised only with respect to that your shares are representednumber of Shares which could
have been exercised under the Options had such Options been exercised by
Optionee on the date of such termination (for a termination other than Cause)
and only for the limited period of time set forth in Section 4.

6. DEATH OF OPTIONEE: NO ASSIGNMENT. The rights of Optionee under this Agreement
may not be assigned or transferred except by will, by the laws of descent or
distribution, and may be exercised during the lifetime of Optionee only by such
Optionee; provided, however, that in the event of disability (within the meaning
of Section 22(e)(3) of the Code) of Optionee, Optionee's designee or legal
representative may exercise the Options on behalf of Optionee (provided the
Options would have been exercisable by Optionee) until the right to exercise the
Options otherwise expires. Any attempt to sell, pledge, assign, hypothecate,
transfer, or otherwise dispose of the Options in contravention of this Agreement
or the Plan shall be void. If Optionee should die while Optionee is engaged in
an employment relationship with the Company or within 90 days after termination
of such relationship, and provided Optionee's rights hereunder shall have
vested, in whole or in part, pursuant to Section 2 hereof, Optionee's designee,
legal representative, or legatee, the successor trustee of Optionee's inter
vivos trust or the person who acquired the right to exercise the Options by
reason of the death of Optionee (individually, a "Successor") shall succeed to
Optionee's rights under this Agreement. After the death of Optionee, only a
Successor may exercise the Options.


                                       D-2
                                     



7. EXERCISE OF OPTIONS. No Option granted under this Agreement shall be
exercisable until and except to the extent that it has vested. On or after the
vesting of the Options in accordance with Section 2 hereof and until termination
of the Options in accordance with this Agreement and the Plan, the Options may
be exercised by Optionee (or such other person specified in Section 6 hereof) to
the extent exercisable as determined under Section 2 hereof, upon delivery of
the following to the Company at its principal executive offices:

         (a) a written notice of exercise which identifies this Agreement, the
type of Option to be exercised, and states the number of Shares to be purchased;

         (b) a check, cash or any combination thereof in the amount of the
aggregate Purchase Price (or pay ment of the aggregate Purchase Price in such
other form of lawful consideration as the Committee may approve from time to
time under the provisions of Section 7 of the Plan);

         (c) a check or cash in the amount reasonably requested by the Company
to satisfy the Company's with holding obligations under federal, state or other
applicable tax laws with respect to the taxable income, if any, recognized by
Optionee in connection with the exercise, in whole or in part, of the Options
(unless the Company and Optionee shall have made other arrangements for
deductions or withholding from Optionee's wages, bonus or other income paid to
Optionee by the Company, provided, however, such arrangements must satisfy the
requirements of all applicable tax laws);

         (d) any written representations and/or undertakings, in such form and
substance as the Company may deem necessary or desirable to assure compliance
with all applicable legal and accounting requirements; and

         (e) such further acts as may be necessary to register Optionee as a
shareholder of the Company. Fractional share interests shall be disregarded, but
may be cumulated. No fewer than 100 Options may be exercised at any one time,
unless the number is the total number of Options exercisable at the meeting by promptly votingtime.

8. CONTINUANCE OF EMPLOYMENT REQUIRED; NO EMPLOYMENT COMMITMENT. The vesting
schedule requires continued employment through each applicable vesting date as a
condition to the vesting of the applicable installment of the Options and submitting your proxy by Internet, by telephone,the
rights and benefits under this Agreement. Partial employment, even if
substantial, during any vesting period will not entitle Optionee to any
proportionate vesting or by completing, executingavoid or mitigate a termination of rights and returningbenefits
upon or following a termination of employment as provided in Section 3 above or
under the enclosed proxy card.
     I hope you will be ablePlan.

9. NO RIGHTS AS A STOCKHOLDER. Neither Optionee nor any other person entitled to
attendexercise any Option shall have any of the Annual Meeting and look forwardrights or privileges of a stockholder
of the Company as to seeing you on May 15, 2003.

Robert B. Mang
Chairman of the Company and
Chief Executive Officer
April 25, 2003
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
GALYAN’S TRADING COMPANY, INC.
ANNUAL MEETING OF SHAREHOLDERS
Thursday, May 15, 2003
The undersigned hereby appoints C. David Zoba and Edward S. Wozniak, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of theany shares of Common Stock until the issuance and delivery
to him or her of Galyan’sa certificate evidencing the shares registered in his or her
name. No adjustment will be made for dividends or other rights as to a
stockholder for which a record date is prior to such date of delivery.

10. THE PLAN. The Options and all rights of Optionee thereunder and/or hereunder
are subject to, and Optionee agrees to be bound by, all of the terms and
conditions of the Plan, which are incorporated herein by this reference, and
apply to the same extent as if the Options had been issued pursuant to the Plan;
provided, however, the limitation in Section 5(b) of the Plan on the number of
options that may be granted in any calendar year to an individual shall not
apply. Unless otherwise expressly provided in these terms and conditions,
provisions of the Plan that confer discretionary authority on the Board or the
Committee do not (and shall not be deemed to) create any additional rights in
Optionee not expressly set forth in this Agreement or in a written amendment
hereto signed by the Company. If there is


                                       D-3
                                     


any conflict or inconsistency between the terms and conditions of this Agreement
and of the Plan, the terms and conditions of the Plan shall govern; provided,
however, notwithstanding any provision of the Plan to the contrary, including
the final sentence of Section 8.1 thereof, any determination of whether
Optionee's employment has terminated and the section of Optionee's Employment
Agreement pursuant to which such termination occurs shall be made pursuant to
the terms of the Employment Agreement without regard to the Plan or this Option
Agreement. Optionee acknowledges receipt of a complete copy of the Plan and
agrees to be bound by its terms. Optionee acknowledges reading and understanding
the Plan.

         (a) FURTHER ASSURANCES. Each party hereto agrees to perform any further
acts and execute and deliver any documents which may be reasonably necessary to
carry out the intent of this Agreement.

         (b) NOTICES. Except as otherwise provided herein, all notices,
requests, demands and other communica- tions under this Agreement shall be in
writing, and if by telegram or telecopy, shall be deemed to have been validly
served, given or delivered when sent, or if by personal delivery or messenger or
courier service, or by registered or certified mail, shall be deemed to have
been validly served, given or delivered upon actual delivery, at the following
addresses, telephone and facsimile numbers (or such other address(es), telephone
and facsimile numbers a party may designate for itself by like notice):

If to Optionee:

         To the Optionee's most recent address or telecopy number reflected on
the Company's records.

If to the Company:

         Galyan's Trading Company, Inc.
         (“Galyan’s”) thatOne Galyans Parkway
         Plainfield, IN 46168
         Attn:  General Counsel
         Telecopy:  (317) 532-0269

         With a copy to:

         Norman S. Matthews
         650 Madison Ave., 23rd Floor
         New York, NY  10022

         (c) AMENDMENTS. This Agreement may be amended only by a written
agreement executed by both of the undersignedparties hereto. The Company may, however,
unilaterally waive any provision hereof in writing to the extent such waiver
does not adversely affect the interests of Optionee hereunder, but no such
waiver shall operate as or be construed to be a subsequent waiver of the same
provision or a waiver of any other provision hereof.

         (d) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Indiana without regard to conflict of
law principles thereunder.

                                       D-4
                                     

         (e) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and understanding among the parties pertaining to the subject matter hereof and
supersedes any and all prior agreements, whether written or oral, relating
hereto.

         (f) HEADINGS. Introductory headings at the beginning of each section
and subsection of this Agreement are solely for the convenience of the parties
and shall not be deemed to be a limitation upon or description of the contents
of any such section and subsection of this Agreement.

         (g) COUNTERPARTS. This Agreement may be executed in two counterparts,
each of which shall be deemed an original and both of which, when taken
together, shall constitute one and the same agreement.

         IN WITNESS WHEREOF, the Company and Optionee have executed this
Agreement as of the date first above written.



THE COMPANY:                                  OPTIONEE:

Galyan's Trading Company, Inc.
an Indiana corporation


By:________________________________           ________________________________
    Norman S. Matthews,                       Edwin J. Holman
    Chairman of the Board


REV. 3/16/04


                                       D-5
                                     

                                   APPENDIX E

                         2004 RESTRICTED STOCK AGREEMENT

         This 2004 Restricted Stock Agreement is entitledentered into between Galyan's
Trading Company, Inc., an Indiana corporation ("Company"), and Edwin J. Holman
("Employee"), effective as of March 1, 2004.

                                   BACKGROUND

         A. Company and Employee are parties to votean Amended Employment Agreement,
dated August 29, 2003 ("Employment Agreement").

         B. Company desires to grant Employee 50,000 shares of unregistered
common stock of Company, effective as of the date hereof, subject to the
conditions set forth in this 2004 Restricted Stock Agreement and subject to
approval by Company's shareholders at Company's next annual meeting scheduled
for May 21, 2004 (the "Annual Meeting").

         In consideration of the premises, Company and Employee agree as
follows:

                                    AGREEMENT

         1. Subject only to approval by Company's shareholders at the Annual
Meeting, Company grants Employee 50,000 shares of Shareholdersunregistered common stock of
Company, effective as of March 1, 2004, which shares ("2004 Restricted Shares")
shall be subject to the restrictions specified in this 2004 Restricted Stock
Agreement. Company agrees to endeavor to register the 2004 Restricted Shares
within a reasonable time after the grant date specified in the preceding
sentence.

         2. Until such time as the 2004 Restricted Shares become vested,
Employee shall not have any right to sell, transfer, pledge, hypothecate, or
otherwise dispose of the 2004 Restricted Shares. Employee represents and
warrants to Company that he shall not sell, transfer, pledge, hypothecate, or
otherwise dispose of the 2004 Restricted Shares in violation of applicable
securities laws or the provisions of this 2004 Restricted Stock Agreement.
Except as expressly provided in this 2004 Restricted Stock Agreement, all
non-vested 2004 Restricted Shares shall be forfeited upon Employee's termination
of employment.

         3. The 2004 Restricted Share shall vest as follows:

            (a) Unless vesting of the 2004 Restricted Shares is accelerated
         pursuant to Subsections (b) or (c) below, one-third of the 2004
         Restricted Shares shall become vested on each of the first three
         anniversaries of the date hereof, provided Employee is employed on such
         anniversary date.

            (b) If Employee's employment terminates under the circumstances
         covered by Section 5(b) or (c) of the Employment Agreement, all 2004
         Restricted Shares granted to Employee shall become fully vested (to the
         extent not already vested) upon Employee's termination of employment.

            (c) If Employee's employment terminates pursuant to Section 4(c) or
         4(d) of the Employment Agreement, all 2004 Restricted Shares granted to
         Employee shall become fully vested (to the extent not already vested)
         upon Employee's termination of employment.


                                       E-1
                                     


            (d) If a Change in Control (as defined in Section 7 of the
         Employment Agreement occurs, all 2004 Restricted Shares granted to
         Employee shall become fully vested (to the extent not already vested),
         effective as of the date on which such Change in Control occurs.

         4. Employee represents and warrants to Company that he is acquiring the
2004 Restricted Shares for his own account for investment and not with a view to
or for resale in connection with any distribution of the 2004 Restricted Shares
and that he has no present intention of distributing or reselling the 2004
Restricted Shares. Employee acknowledges that the certificate or certificates
representing the 2004 Restricted Shares shall bear an appropriate legend
relating to restrictions on transfer.

         IN WITNESS WHEREOF, Company and Employee have executed this Agreement,
effective as of the date specified in the first paragraph hereof.

EMPLOYEE                                  GALYAN'S TRADING COMPANY, INC.


________________________________          By:________________________________
Edwin J. Holman                                Norman S. Matthews
                                               Chairman of the Board

- --------------------------------          ----------------------------------
(Date)                                    (Date)


                                       E-2
                                     


                                   APPENDIX F
                         GALYAN'S TRADING COMPANY, INC.
                             1999 STOCK OPTION PLAN
                               (2004 RESTATEMENT)

                         -------------------------------

                                    ARTICLE I
                             RESTATEMENT AND PURPOSE

         SECTION 1.1. RESTATEMENT OF PLAN. Galyan's Trading Company, Inc., an
Indiana corporation ("Company"), first adopted the Galyan's Trading Company,
Inc. 1999 Stock Option Plan ("Plan"), effective October 15, 1999. This document
sets out the terms of the Plan, as restated effective May 21, 2004, which
restatement was approved by the Company's shareholders at their annual meeting
on May 21, 2004. The terms of the Plan, as restated herein, shall not affect any
Awards granted before the effective date of this restatement.

         SECTION 1.2. DESCRIPTION OF PLAN. The Plan is designed to promote the
interests of the Company and its shareholders by providing a means by which the
Board of Directors may award stock-based incentives to designated employees,
directors, officers, and/or consultants of the Company and Subsidiaries
("Participants") who are expected to contribute materially to the success of the
Company. The Plan permits the Board to grant Incentive Stock Options,
Non-Qualified Stock Options, Restricted Stock, and Stock Appreciation Rights,
all as provided herein.

         SECTION 1.3. PURPOSE OF PLAN. The purpose of the Plan is to further the
growth, development, and financial success of the Company by providing for
stock-based incentives to Participants that align the Participants' interests
more closely with those of the Company's shareholders. The Company believes that
the Plan will assist it in its efforts to attract and retain quality key
employees and service providers.

                                   ARTICLE II
                      DEFINITIONS AND RULES OF CONSTRUCTION

         SECTION 2.1. DEFINITIONS. When capitalized in this Plan, the following
terms shall have the meanings specified below, unless the context otherwise
requires:

            (a) "Award" means a grant made to a Participant pursuant to Article
         VI.

            (b) "Award Agreement" means a written instrument between the Company
         and a Participant evidencing an Award and prescribing the terms,
         conditions, and restrictions applicable to the Award.

            (c) "Board of Directors" or "Board" means the Company's Board of
         Directors, as constituted from time to time.

            (d) "Code" means the Internal Revenue Code of 1986, as amended from
         time to time.

            (e) "Committee" means the committee described in Section 3.1;
         provided however, to the extent that the Board has not designated a
         Committee, "Committee" means the "Board."


                                       F-1
                                     


            (f) "Company" means Galyan's Trading Company, Inc.

            (g) "Employee" means any individual employed by the Company or a
         Subsidiary, including an employee who is a member of the Board or the
         board of directors of a Subsidiary.

            (h) "Exercise Price" means the price, if any, required to be heldpaid to
         the Company upon the exercise of an Award.

            (i) "Fair Market Value" means, with respect to a Share on any date,
         (i) if the Shares are listed or admitted to trade on a national
         securities exchange, the closing price of a Share on the Composite
         Tape, as published in the Western Edition of The Wall Street Journal,
         of the principal national securities exchange on which the Shares are
         listed or admitted to trade on such date, or, if there is no trading of
         the Shares on such date (or if the market has not closed at 9:00 a.m. localthe
         applicable time), then the closing price of a Share as quoted on such
         Composite Tape on the next preceding date on which there was trading in
         Shares; (ii) if the Shares are not listed or admitted to trade on a
         national securities exchange, the last price for a Share on such date,
         as furnished by the National Association of Securities Dealers, Inc.
         ("NASD") through the NASDAQ National Market Reporting System or a
         similar organization, if the NASD is no longer reporting such
         information; (iii) if the Shares are not listed or admitted to trade on
         a national securities exchange and are not reported on the National
         Market Reporting System, the mean between the bid and asked price for a
         Share on such date, as furnished by the NASD or a similar organization;
         or (iv) if the Shares are not listed or admitted to trade on a national
         securities exchange, are not reported on the National Market Reporting
         System, and if bid and asked prices for the Shares are not furnished by
         the NASD or a similar organization, the value as established by the
         Committee at such time on Thursday, May 15, 2003,for purposes of the Plan.

            (j) "Incentive Stock Option" means a stock option that satisfies the
         requirements of Code Section 422.

            (k) "Non-Qualified Stock Option" means a stock option that does not
         satisfy the requirements of Code Section 422.

            (l) "Option" means an Incentive Stock Option or a Non-Qualified
         Stock Option granted pursuant to the Plan.

            (m) "Participant" means any person to whom an Award has been granted
         under the Plan, provided, however, a Participant shall cease to be such
         at such time as all Awards granted to him under the Plan have been
         exercised and/or forfeited.

            (n) "Plan" means the Galyan's Trading Company, Inc. 1999 Stock
         Option Plan, as set out in this document, as amended from time to time.

            (o) "Restricted Stock" means an Award of Shares that, at the time of
         grant, are nontransferable and are subject to a substantial risk of
         forfeiture.

            (p) "Rule 16b-3" means Rule 16b-3 under the Securities Exchange Act
         of 1934, as amended.

            (q) "Share" means a share of the Company's no-par value common
         stock.


                                       F-2
                                     


            (r) "Stock Appreciation Right" or "SAR" has the meaning given to it
         in Section 6.2(a).

            (s) "Subsidiary" means any company (other than the Company) that is
         a "subsidiary corporation" within the meaning of Code Section 424.

         SECTION 2.2. RULES OF CONSTRUCTION. The Westin Hotel, 50 South Capitol Avenue, Indianapolis, Indiana 46204,following rules shall apply in
construing the Plan and any adjournments or postponements thereof.
If shares of Galyan’s Common Stock are held forAward Agreement:

            (a) This Plan, the account of the undersigned under the Galyan’s SavingsAwards, all documents evidencing Awards and Retirement Plan, then the undersigned hereby directs the trustee to vote all
         shares of Galyan’s Common Stock in the undersigned’s accountother related documents shall be governed by, and construed in
         accordance with, the instructions givenlaws of the State of Indiana without regard to
         conflicts of law principles.

            (b) If a court of competent jurisdiction holds any provision invalid
         and unenforceable, the remaining pro visions of the Plan shall continue
         in effect, provided that the essential economic terms of the Plan and
         any Award can still be enforced.

            (c) Captions and headings are used solely as a convenience to
         facilitate reference and shall not be deemed in any way material or
         relevant to the construction of the Plan or any provision thereof.

            (d) Reference to any provision of the Code or other law shall be
         deemed to include a reference to the successor of such provision.

            (e) The Plan and the Awards are intended to comply with and shall be
         construed to effect compliance with, the exemptions under Rule 16b-3,
         in the case of Participants who are subject to Section 16 of the
         Securities Exchange Act of 1934; provided, however, the Company shall
         have no liability to any Participant for Section 16 consequences of an
         Award.

            (f) It is intended that Awards granted with an Exercise Price not
         less than Fair Market Value on the date of grant shall qualify as
         performance-based compensation or otherwise be exempt from
         deductibility limitations under Code Section 162(m), and the Plan and
         the Awards shall be construed accordingly.

                                   ARTICLE III
                                 ADMINISTRATION

         SECTION 3.1. COMMITTEE. Except as otherwise provided herein, the Plan
shall be administered by the Board or, at the Annual MeetingBoard's option, by a compensation
committee thereof to which the Board has duly delegated the administration of
the Plan. The Committee shall consist solely of two or more non-employee
directors (within the meaning of Rule 16b-3) who are "outside directors" for
purposes of Code Section 162(m) and the regulations thereunder. Any action of
the Committee with respect to administration of the Plan shall be taken by a
majority vote or written consent of its members.

         SECTION 3.2. POWERS OF COMMITTEE. Subject to the express provisions of
the Plan and any express limitations on its delegated authority, the Committee
is authorized and empowered to administer the Plan and to (i) designate those
person who are Participants; (ii) grant Awards; (iii) determine effective date
of each Award, the number of Shares subject to the Award, and the other terms
and conditions of the Award, which terms and conditions need not be same for
each Award; (iv) interpret the Plan; (v) determine the Fair Market Value of the
Shares; (vi) accelerate the time during which an Award may be exercised, either
in accordance with Section 6.8 or otherwise, in each case notwithstanding the
provisions of the Award Agreement stating the time during which the Award may be
exercised; (vii) prescribe, amend, and rescind rules relating to the Plan;


                                       F-3
                                     


(viii) authorize any person to execute on behalf of the Company any instrument
required to effectuate the grant of an Award previously granted by the
Committee; (ix) determine the rights and obligations of Participants under the
Plan; and (x) make all other determinations deemed necessary or advisable for
the administration of the Plan.

         SECTION 3.3. BINDING DETERMINATIONS. Any action taken by, or inaction
of, the Company, the Board, or the Committee relating or pursuant to the Plan
(including, without limitation, any determination of Fair Market Value) shall be
within the sole discretion of that entity or body and shall be conclusive and
binding upon all persons. Subject only to compliance with the express provisions
hereof, the Board and Committee may act in their sole discretion in matters
within their authority related to the Plan.

         SECTION 3.4. RELIANCE ON EXPERTS. In making any determination or in
taking or not taking any action under the Plan, the Committee or the Board, as
the case may be, may obtain and rely upon the advice of experts, including
employees of and professional advisors to the Company.

         SECTION 3.5. DELEGATION. The Committee may delegate ministerial
non-discretionary functions to one or more Company officers or employees.

         SECTION 3.6. NO LIABILITY. No director, officer, or agent of the
Company shall be liable for any action, omission, or decision under the Plan
that is taken, made, or omitted in good faith.

                                   ARTICLE IV
                                   ELIGIBILITY

         The Committee shall, from time to time, designate those persons
eligible to receive Awards under the Plan from among the key employees,
directors, officers, and/or consultants of the Company or any Subsidiary. The
Committee may grant more than one Award to any Participant.

                                    ARTICLE V
                            SHARES SUBJECT TO AWARDS

         SECTION 5.1. SHARES AVAILABLE. The only shares subject to Awards shall
be the Company's authorized, but unissued, or reacquired Shares.

         SECTION 5.2. AGGREGATE SHARE LIMIT. The aggregate number of Shares with
respect to which Awards may be granted shall be the sum of the following:

         (a) two million (2,000,000); plus

         (b) effective May 29, 2002, an additional 511,181 Shares; plus

         (c) effective May 29, 2003, an additional 513,576 Shares; plus

         (d) effective May 29, 2004, an additional 520,871 Shares.


                                      F-4
                                     

Upon the expiration or termination, in whole or in part, for any reason of an
outstanding Award or any portion thereof that shall not have vested or shall not
have been exercised in full, or upon forfeiture of any Share of Restricted
Stock, or upon the surrender of Shares as payment for an Option, any Shares
subject to the Award that have not been acquired by the Participant or that are
forfeited by the Participant shall again become available for the granting of
additional Awards.

         SECTION 5.3. LIMITATION APPLICABLE TO SPECIFIC AWARDS. The maximum
number of Shares that may be delivered pursuant to Incentive Stock Options
granted under the Plan is 1,000,000. The only limitations on the number of
Shares available for Non-Qualified Stock Options, Stock Appreciation Rights, and
Restricted Stock Awards shall be those specified in Sections 5.2 and 5.4.

         SECTION 5.4. ANNUAL LIMITATIONS ON AWARDS TO ANY PARTICIPANT.

            (a) The maximum number of Shares subject to all Awards granted in
         any calendar year to a Participant shall be limited to 250,000.

            (b) The maximum number of Shares subject to Restricted Stock Awards
         granted in any calendar year to a Participant shall not exceed 100,000.

         SECTION 5.5. ADJUSTMENTS UPON RECAPITALIZATION OR REORGANIZATION.
Subject to Section 6.5, if the outstanding Shares are changed into, or exchanged
for, a different number or kind of shares or securities of the Company through
any capital reorganization or reclassification, or if the number of outstanding
Shares is changed through a stock split or stock dividend, an appropriate
adjustment shall be made by the Committee in the number, kind, and/or Exercise
Price with respect to Shares as to which Awards may be granted under the Plan. A
corresponding adjustment shall likewise be made in the number, kind, and/or
Exercise Price for Shares with respect to which there are unexercised
outstanding Awards. Any such adjustment in an outstanding Award, however, shall
be made without change in the total price applicable to the unexercised portion
of the Award but with a corresponding adjustment in the price for each Share
covered by the Award. In making such adjustments, or in determining that no such
adjustments are necessary, the Committee may rely upon the advice of counsel and
accountants to the Company, and the good faith determination of the Committee
shall be final, conclusive, and binding. No fractional shares of stock shall be
issued or issuable under the Plan on account of any such adjustment.

                                   ARTICLE VI
                                     AWARDS

         SECTION 6.1. GRANT OF AWARDS. Awards authorized under this Article VI
may be granted pursuant to another incentive program that incorporates by
reference the terms and conditions of this Plan. Awards may be granted singly or
in combination or tandem with other Awards. Awards may also be granted in
replacement of, or as substitution for, other awards granted by the Company,
whether or not such other awards were granted under this Plan. Without limiting
the foregoing, if a Participant pays all or part of the Exercise Price or taxes
associated with an Award by the transfer of Shares or the surrender of all or
part of an Award (including the Award being exercised), the Committee may, in
its discretion, grant a new Award to replace the Shares that were transferred or
the Award that was surrendered. The Company may assume awards granted by an
organization acquired by the Company or may grant Awards in replacement of, or
in substitution for, any such awards.


                                       F-5
                                     


         SECTION 6.2. TYPES OF AWARDS. Awards may include, but are not limited
to, the following:

            (a) STOCK APPRECIATION RIGHT (SAR) - A right to receive a payment,
         in cash or Shares, equal to the excess of (A) the Fair Market Value of
         a specified number of Shares on the date the right is exercised over
         (B) the Fair Market Value on the date the right is granted, all as
         determined by the Committee. The right may be conditioned upon the
         occurrence of certain events, such as a change in control, or may be
         unconditional, as determined by the Committee.

            (b) RESTRICTED STOCK AWARD - An Award that is made in Restricted
         Stock. All or part of any Restricted Stock Award may be subject to
         conditions, restrictions, and risks of forfeiture, as and to the extent
         established by the Committee.

            (c) OPTION - A right to purchase a specified number of Shares,
         during a specified period and at a specified exercise price, all as
         determined by the Committee. An Option may be an Incentive Stock Option
         or a Non-Qualified Stock Option. In addition to the terms, conditions,
         vesting periods, and restrictions established by the Committee in the
         Award Agreement, Incentive Stock Options must comply with the
         requirements of Code Section 422, Section 6.4, and this Article VI.

         SECTION 6.3. TERMS AND CONDITIONS OF AWARDS; AGREEMENTS. Awards granted
under the Plan shall be evidenced by a written agreement ("Award Agreement")
executed by the Company and the Participant, which shall contain such terms and
be in such form as the Committee may from time to time approve, subject to the
following limitations and conditions:

            (a) GRANT AND NOTICE OF AWARD. The date of an Award grant shall, for
         all purposes, be the date on which the Board makes the determination
         granting such an Award. Notice of the determination shall be given to
         each Participant to whom an Award is granted within a reasonable time
         after the date of grant. The grant of an Award shall not obligate the
         Participant to exercise it.

            (b) NUMBER OF SHARES. The Award Agreement shall state, as
         appropriate, the type and total number of Shares (i) granted as
         Restricted Stock, (ii) with respect to which Stock Appreciation Rights
         are granted, and/or (iii) with respect to which Options are granted.

            (c) EXERCISE PRICE. The Award Agreement shall state, as applicable,
         the Exercise Price per share of the Shares with respect to which
         Options are issued and the Fair Market Value of Shares with respect to
         which Stock Appreciation Rights are issued. The Exercise Price shall be
         determined by the Committee. For Incentive Stock Options, the Exercise
         Price shall satisfy the requirements of the Section 6.4 and the
         provisions of the Code applicable to incentive stock options.

            (d) EXERCISE AND PAYMENT OF EXERCISE PRICE. Once vested, an Award
         may be exercised by the Participant by (i) giving written notice to the
         Company specifying the number of Shares to be purchased and accompanied
         by payment of the full Exercise Price therefor in cash, by check, or in
         such other form of lawful consideration as the Committee may approve,
         including without limitation and in the sole discretion of the
         Committee, the transfer by the Participant to the Company of
         outstanding Shares held by the Participant in a manner intended to
         comply with the provisions of Rule 16b-3, if applicable, and (ii)
         satisfying any adjournmentsother requirements set forth herein (including, without
         limitation, the tax withholding requirements of Article VII) or postponementsin the
         applicable Award Agreements. Any Shares delivered by the Participant in
         connection with the exercise of an Award must have been owned by the
         Participant for at least six months as of the date of delivery. Shares
         used to satisfy the Exercise Price of an Award shall be valued at their
         Fair Market Value on the date of exercise.


                                      F-6

                                     

            (e) RESTRICTIONS ON GRANTS. Notwithstanding any other provisions set
         forth herein or in an Award Agreement, no Award may be granted under
         the Plan after October 14, 2009, which is ten years after the initial
         adoption of the Plan.

            (f) VESTING OF AWARDS. Awards shall vest based on longevity of
         service and/or other schedules established by the Committee, as set
         forth in each Award Agreement. The Committee may grant Awards that are
         fully vested and exercisable at grant.

            (g) DEFERRAL OF AWARDS. With the approval of the Committee, the
         delivery of Shares, cash, or any combination thereof subject to an
         Award may be deferred, either in the form of installments or a single
         future delivery. The Committee may also permit selected Participants to
         defer the payment of some or all of their Awards, as well as other
         compensation, in accordance with procedures established by the
         Committee to assure that the recognition of taxable income is deferred
         under the Code. The Committee may also establish rules and procedures
         for the crediting of interest on deferred cash payments.

            (h) ISSUANCE OF SHARES AND COMPLIANCE WITH SECURITIES LAWS. The
         Company may postpone the issuance and delivery of certificates
         representing Shares until (i) the admission of such Shares to listing
         on any stock exchange on which Shares are then listed and (ii) the
         completion of such registration or other qualification of Shares under
         any state or federal law, rule, or regulation as the Company shall
         determine to be necessary or advisable, which registration or other
         qualification the Company shall use its best efforts to complete;
         provided, however, a person purchasing or otherwise receiving Shares
         pursuant to the Plan has no right to require the Company to register
         the Shares under federal or state securities laws at any time. Any
         person purchasing or otherwise receiving Shares pursuant to the Plan
         may be required to make such representations and furnish such
         information as may, in the opinion of counsel for the Company, be
         appropriate to permit the Company, in light of the existence or
         non-existence with respect to such Shares of an effective registration
         under the Securities Act of 1933, as amended, or any similar state
         statute, to issue the Shares in compliance with the provisions of those
         or any comparable acts.

         SECTION 6.4. ADDITIONAL LIMITATIONS APPLICABLE TO INCENTIVE STOCK
OPTIONS.

            (a) GENERAL. To the extent that any Award granted pursuant to this
         Plan contains an Incentive Stock Option, the limitations and conditions
         of this Section shall apply to such Incentive Stock Option and the
         Award Agreement relating thereto in addition to the terms and
         conditions otherwise specified by the Plan and the Award Agreement.

            (b) PRICE. The price of an Incentive Stock Option shall be an amount
         per share not less than the Fair Market Value per share of the Shares
         on the date of granting of the option. In the case of Incentive Stock
         Options granted to an employee of the Company who is a 10% shareholder,
         the option price shall be an amount per share not less than one hundred
         ten percent (110%) of the Fair Market Value per share of the Shares on
         the date of the granting of the Incentive Stock Option.

            (c) EXERCISE PERIOD. Unless terminated earlier pursuant to other
         terms and provisions of the Award Agreement, the term of each Incentive
         Stock Option shall expire within the period prescribed in the agreement
         relating thereto, which shall not be more than five years from the date
         the Incentive Stock Option is granted, if the Participant is a 10%
         shareholder (as defined in Code Section 422(b)(6)), and not more than
         seven years from the date the Incentive Stock Option is granted, if the
         Participant is not a 10% shareholder (as defined in Code Section
         422(b)(6)).


                                      F-7
                                     

            (d) LIMITATION ON GRANTS. No Incentive Stock Option shall be granted
         under this Plan after October 14, 2009.

            (e) LIMITATION ON TRANSFERABILITY. No Incentive Stock Option shall
         be assignable or transferable except by will or under the laws of
         descent and distribution. During the lifetime of a Participant, an
         Incentive Stock Option shall be exercisable only by the Participant and
         may not be transferred or assigned.

            (f) MAXIMUM EXERCISE RULE. The aggregate Fair Market Value
         (determined at the time the Option is granted) of the Shares with
         respect to which Incentive Stock Options are exercisable for the first
         time by any Participant during any calendar year under this Plan and
         any other incentive stock option plan (within the meaning of Code
         Section 422) of the Company or any parent or subsidiary corporation of
         the Company shall not exceed $100,000.

            (g) OTHER CODE LIMITS. Incentive Stock Options may be granted only
         to employees of the Company (or a Subsidiary) that satisfy the other
         eligibility requirements of the Code. There shall be imposed in any
         Award Agreement relating to Incentive Stock Options such other terms
         and conditions as from time to time are required for the Option be an
         "incentive stock option" within the meaning of Code Section 422.

         SECTION 6.5. TERMINATION OF AWARDS.

            (a) Each Award granted under the Plan shall set forth a termination
         date, which shall be not later than seven years from the date of grant,
         subject to earlier termination as set forth in Section 6.5 or 6.8, or
         as otherwise set forth in the Award Agreement.

            (b) The Committee shall establish the effect of a termination of
         employment or service on the rights and benefits under each Award and
         in so doing may make distinctions based upon, among other factors, the
         cause of termination and type of Award. A Participant's termination of
         employment, or termination of service as a director or consultant,
         shall not, unless otherwise expressly provided by the Committee,
         accelerate or otherwise increase the number of Shares subject to an
         Award. Following such termination of employment or service, an Award
         may be exercised only in accordance with the applicable Award Agreement
         and, unless otherwise expressly provided by the Committee, only with
         respect to that number of Shares for which the Award could have been
         exercised by the Participant on the date of such termination.

            (c) The Committee may cancel any unexpired, unpaid, or deferred
         Awards at any time, if the Participant is not in compliance with all
         matters properly comingapplicable provisions of this Plan or with any Award Agreement or if
         the Participant, whether or not he or she is currently employed by the
         Company, engages in any of the following activities without the prior
         written consent of the Company:

                  (1)   Directly or indirectly renders services to or for an
                        organization, or engages in a business, that is, in the
                        judgment of the Committee, in competition with the
                        Company.

                  (2)   Discloses to anyone outside of the Company, or uses for
                        any purpose other than the Company's business, any
                        confidential or proprietary information or material
                        relating to the Company, whether acquired by the
                        Participant during or after employment with the Company.


                                      F-8
                                     

         The Committee may, in its discretion and as a condition to the exercise
         of an Award, require a Participant to acknowledge in writing that he or
         she is in compliance with all applicable provisions of this Plan and of
         any Award Agreement and has not engaged in any activities referred to
         in clauses (1) and (2) above.

            (d) Subject to Section 6.8, (i) upon the dissolution, liquidation,
         or sale of all or substantially all of the business, properties, and
         assets of the Company, (ii) upon any reorganization, merger,
         consolidation, sale, or exchange of securities in which the Company
         does not survive, (iii) upon any sale, reorganization, merger,
         consolidation, or exchange of securities in which the Company does
         survive and any of the Company's shareholders have the opportunity to
         receive cash, securities of another corporation, partnership, or
         limited liability company and/or other property in exchange for their
         capital stock of the Company, or (iv) upon any acquisition by any
         person or group (as defined in Section 13d of the Exchange Act) of
         beneficial ownership of more than 50% of the then outstanding Shares
         (each of the events described in clauses (i), (ii), (iii) or (iv) is
         referred to herein as an "Extraordinary Event"), the Plan and each
         outstanding Award shall terminate, subject to any provision that has
         been made by the Committee through a plan of reorganization or
         otherwise for the substitution, assumption, settlement, or other
         continuation of the Awards. If Awards are to terminate (with no
         substitution, assumption, settlement, or other continuation) in such
         circumstances, each Participant shall have the right, by giving notice
         at least ten days before the Annual Meeting,effective date of the Extraordinary Event
         ("Effective Date"), to exercise on or before the Effective Date, in
         whole or in part, any unexpired Award issued to the Participant, to the
         extent that the Award is vested and exercisable as of the Effective
         Date.

         SECTION 6.6. RIGHTS AS A SHAREHOLDER. Unless otherwise provided by the
Board of Directors or the Committee, a Participant shall have rights as a
shareholder with respect to Shares covered by an Award, including voting rights
or rights to dividends, only upon the date of issuance of a certificate to him
and, if payment is required, only after payment if full has been made for such
Shares.

         SECTION 6.7. LIMITS ON EXERCISE AND TRANSFER.

            (a) Except as expressly provided in (or pursuant to) Subsection (b)
         by applicable law or by the Award Agreement, as the same may be
         amended:

                  (1)   all Awards are non-transferable and shall not be subject
                        in any manner to sale, transfer, anticipation,
                        alienation, assignment, pledge, encumbrance, or charge;

                  (2)   Awards must be exercised only by the Participant; and

                  (3)   amounts payable or shares issuable pursuant to an Award
                        must be delivered only to (or for the account of) the
                        Participant.

         In addition, the Shares shall be subject to the restrictions imposed in
the applicable Award Agreement.

         (b) The exercise and transfer restrictions in Subsection (a) shall not
         apply to:

                  (1)   transfers to the Company;

                  (2)   the designation of a beneficiary to receive benefits if
                        the Participant dies or, if the Participant has died,
                        transfers to or exercises by the Participant's
                        beneficiary, or, in the absence of a validly designated
                        beneficiary, transfers by will or the laws of descent
                        and distribution; or


                                      F-9
                                     

                  (3)   if the Participant has suffered a disability, transfers
                        or exercises on behalf of the Participant by the
                        Participant's duly authorized legal representative in
                        accordance with the applicable Award Agreement.

         SECTION 6.8. ACCELERATION OF AWARDS.

            (a) Notwithstanding the provisions of Article VI or any provision to
         the contrary contained in a particular Award Agreement, the Committee,
         in its sole discretion, may accelerate the vesting and exercisability
         of all or any portion of any Award then outstanding. The decision by
         the Committee to accelerate an Award or to decline to accelerate an
         Award shall be final. In the event of the acceleration of the
         exercisability of Awards as the result of a decision by the Committee
         pursuant to this Section, each outstanding Award so accelerated shall
         be exercisable for a period from and after the date of such
         acceleration and upon such other terms and conditions as the Committee
         may determine in its sole discretion, provided that such terms and
         conditions (other than terms and conditions relating solely to the
         acceleration of exercisability and the related termination of an Award)
         may not materially adversely affect the rights of any Participant
         without the consent of that Participant. Any outstanding Award that has
         not been exercised by the holder at the end of such period shall
         terminate automatically at that time.

            (b) If the vesting of an Award has been accelerated in anticipation
         of an event, and the Committee or the Board later determines that the
         event will not occur, the Committee may rescind the effect of the
         acceleration as to any then outstanding and unexercised or otherwise
         unvested Awards.

            (c) Any discretion with respect to the events addressed in Section
         6.5 or this Section shall be limited to the extent required by
         applicable accounting requirements in the case of a transaction
         intended to be accounted for as a pooling of interests transaction.

         SECTION 6.9. SUBSTITUTE AWARDS. If the Company at any time should
succeed to the business of another entity through a merger, consolidation,
corporate reorganization or exchange, or through the acquisition of stock or
assets of such entity or its subsidiaries or otherwise, Awards may be granted
under the Plan to option holders of such entity or its subsidiaries, in
substitution for options to purchase Shares in such entity held by them at the
time of succession. The Committee, in its sole and absolute discretion, shall
determine the extent to which such substitute Awards shall be granted (if at
all), the person or persons to receive such substitute Awards (who need not be
all option holders of such entity), the number of Awards to be received by each
such person, the exercise price of such Award and the other terms and conditions
of such substitute Awards.


                                   ARTICLE VII
                              WITHHOLDING OF TAXES

         The Company (or a Subsidiary) may deduct and withhold from the wages,
salary, bonus, and other income paid by the Company (or Subsidiary) to the
Participant the requisite tax upon the amount of taxable income, if any,
recognized by the Participant in connection with the exercise in whole or in
part of any Award, the lapse of restrictions with respect to Restricted Stock,
or the sale of the Shares issued to the Participant upon the exercise of an
Award, as may be required from time to time under any federal or state tax laws
and regulations. This withholding of tax shall be made from the Company's (or
Subsidiary's) concurrent or next payment of wages, salary, bonus, or other
income to the Participant or by payment to the Company by the Participant of the
required withholding tax, as the Committee may determine; provided, however,
that, in the sole discretion of the Committee, the Participant may pay such tax
by reducing the number of Shares or amount of cash issued upon exercise of an
Award (for which purpose such Shares shall be valued at Fair Market Value at the


                                      F-10
                                     

time of exercise). Notwithstanding the foregoing, the Company shall not be
obligated to issue certificates representing the Shares to be acquired through
the exercise of an Award, if the Participant fails to provide the Company with
adequate assurance that the Participant will pay such amounts to the Company as
required herein. Participants shall notify the Company in writing of any amounts
included as income in the Participants' federal income tax returns in connection
with an Award. Any Shares or cash withheld by the Company to satisfy a
Participant's withholding tax obligation in connection with an Award shall not
exceed the number of Shares or amount of cash necessary to satisfy the minimum
required levels of withholding under applicable law.

                                  ARTICLE VIII
                              COMPLIANCE WITH LAWS

         SECTION 8.1. GENERAL. The Plan, the granting and vesting of Awards
under the Plan, the offer, issuance, and delivery of the Shares, and the payment
of money under the Plan or under Awards are subject to compliance with all
applicable federal and state laws, rules, and regulations (including but not
limited to state and federal securities laws and federal margin requirements)
and to such approvals by any listing, regulatory, or governmental authority as
may, in the mattersopinion of counsel for the Company, be necessary or advisable in
connection therewith. In addition, any securities delivered under the Plan may
be subject to any special restrictions that the Committee may require to
preserve a pooling of interests under generally accepted accounting principles.
A person acquiring any securities under the Plan shall, if requested by the
Company, provide such assurances and representations to the Company as the
Committee may deem necessary or desirable to assure compliance with all
applicable legal and accounting requirements.

         SECTION 8.2. COMPLIANCE WITH SECURITIES LAWS. No Participant shall
sell, pledge, or otherwise transfer Shares acquired pursuant to an Award or any
interest in such Shares except in accordance with the express terms of the Plan
and the applicable Award Agreement. Any attempted transfer in violation of this
Section shall be void and of no effect. Without in any way limiting the
provisions set forth onabove, no Participant shall make any disposition of all or
any portion of Shares acquired or to be acquired pursuant to an Award, except in
compliance with all applicable federal and state securities laws.
Notwithstanding anything else herein to the reverse side.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” EACHcontrary, the Company has no
obligation to register the Shares or file any registration statement under
either federal or state securities laws.

                                   ARTICLE IX
                    EFFECTIVENESS AND TERMINATION OF THE NOMINEES FOR DIRECTOR. THIS PROXY ALSO GRANTS TO THE PROXYHOLDERS THE DISCRETION TO VOTE THE PROXIESPLAN

         The Plan was originally effective on October 15, 1999, and this
restatement of the Plan is effective May 21, 2004. The Plan shall terminate at
the close of business on October 14, 2009, the tenth anniversary of its
effective date; provided, however, the Board may, in its sole discretion,
terminate the Plan at any prior time. Subject to Section 6.5 and 6.8, no such
termination shall in any way affect any Award then outstanding or the
Committee's authority hereunder with respect to such Award.

                                    ARTICLE X
                                AMENDMENT OF PLAN

         Subject to Article VI, the Committee may make such amendments to the
Plan and/or an Award Agreement as it shall deem advisable; provided, however,
except as permitted by Article VI, no amendment shall materially adversely
affect any Award then outstanding without the written consent of the affected
Participant. Adjustments contemplated by Section 5.5 shall not be deemed to be
amendments for purposes of the foregoing. Shareholder approval for any amendment
shall be required only to the extent required under applicable law, including
Code Section 162(m) and Code Section 422 and other provisions of the Code
applicable to incentive stock options, or to the extent deemed necessary or
advisable by the Board.


                                      F-11
                                     


                                   ARTICLE XI
               LEAVES OF ABSENCE; OTHER TERMINATION OF EMPLOYMENT
                              OR SERVICE PROVISIONS

         If a Participant is not an employee or director and provides services
as a consultant to the Company (or a Subsidiary), the Committee shall be the
sole judge of whether the Participant continues to render services, unless a
contract or Award Agreement otherwise provides. If, in these circumstances, the
Company notifies the Participant in writing that a termination of the
Participant's services for purposes of the Plan has occurred, then (unless the
contract or Award Agreement otherwise expressly provides), the Participant's
termination of services for purposes the Plan and his Awards shall be the date
which is 10 days after the Company's mailing of the notice or, in the case of a
termination for cause, the date of the mailing of the notice. Unless Company
policy or the Committee otherwise provides, an employment relationship shall not
be considered terminated in the case of (i) sick leave, (ii) military leave, or
(iii) any other leave of absence authorized by the Company or the Committee;
provided that unless reemployment upon the expiration of such leave is
guaranteed by contract or law, such leave is for a period of not more than 90
days. In the case of any employee on an approved leave of absence, continued
vesting of the Participant's Awards while on leave from the employ of the
Company may be suspended until the employee returns to service, unless the
Committee otherwise provides or applicable law otherwise requires. In no event
shall an Award be exercised after the expiration of the term set forth in the
Option or Award Agreement. For purposes of this Plan and any Award, if an entity
ceases to be a Subsidiary, a termination of employment or service shall be
deemed to have occurred with respect to each eligible person in respect of the
Subsidiary who does not continue as an eligible person in respect of another
entity within the Company.

                                   ARTICLE XII
                                 INDEMNIFICATION

         In addition to such other rights of indemnification as they may have as
members of the Board, the members of the Committee shall be indemnified by the
Company to the fullest extent permitted by law against reasonable expenses,
including attorneys' fees, actually and necessarily incurred in connection with
the defense of any action, suit, or proceeding, or in connection with any appeal
thereof, to which they or any of them may be a party by reason of any act or
failure to act under or in connection with the Plan or any Award, and against
all amounts paid by them in satisfaction of a judgment in any such action, suit,
or proceeding except in relation to matters as to which it shall be adjudged in
such action, suit, or proceeding that such Committee member is not entitled to
indemnification under applicable law; provided, however, within 60 days after
institution of any such action, suit, or proceeding, such Committee member shall
in writing offer the Company the opportunity, at the Company's expense, to
handle and defend the same, and such Committee member shall cooperate with and
assist the Company in the defense of any such action, suit, or proceeding. The
Company shall not be obligated to indemnify any Committee member with regard to
the settlement of any action, suit, or proceeding to which the Company did not
give its prior written consent.

                                  ARTICLE XIII
                    NOT AN EMPLOYMENT OR CONSULTING AGREEMENT

         Nothing contained in the Plan or in any Award Agreement shall confer,
intend to confer, or imply any right of employment or right to continued
employment by, or rights to a continued relationship with, the Company (or any
affiliate) in favor of any Participant or limit the ability of the Company (or
any affiliate) to terminate, with or without cause, in its sole and absolute
discretion, the employment of any Participant, subject to the terms of any
written employment to which a Participant is a party. In addition, nothing
contained in the Plan or in any Award Agreement shall preclude any lawful action
by the Company or the Board. Status as an eligible person under the Plan shall
not be construed as a commitment that any Award will be granted to the eligible
person.

                                      F-12
                                     

                                   ARTICLE XIV
                                  MISCELLANEOUS

         SECTION 14.1. NON-EXCLUSIVITY OF PLAN. Nothing in the Plan shall limit
or be deemed to limit the authority of the Board or the Committee to grant
awards or authorize any other compensation, with or without reference to the
Shares, under any other plan or independent authority.

         SECTION 14.2. NO RESTRICTION ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
CORPORATE POWERS. The existence of the
Plan and the Awards granted hereunder shall not affect or restrict in any way
the right or power of the Board or the shareholders of the Company to make or
authorize any adjustment, recapitalization, reorganization or other change in
the Company's capital structure or its business, any merger or consolidation of
the Company, any issue of bonds, debentures, preferred or prior preference
stocks ahead of or affecting the Company's capital stock or the rights thereof,
the dissolution or liquidation of the Company or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding.

         SECTION 14.3. NO FIDUCIARY DUTIES. Neither the provisions of this Plan
(or of any related documents), nor the creation or adoption of this Plan, nor
any action taken pursuant to the provisions of this Plan shall create, or be
construed to create, a trust of any kind or a fiduciary relationship between the
Company and any Participant or other person.


                                      F-13