SCHEDULE 14A INFORMATION
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<Table>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</Table>
AEROPOSTALE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
AEROPOSTALE, INC.
1372 BROADWAY, 8TH FLOOR
NEW YORK, NEW YORK 10018
646-485-5398
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 11, 2003
To the Stockholders of Aeropostale, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Aeropostale, Inc., a Delaware corporation (the "Company"), will be held at the
New School University, University Hall, 55 West 13th Street, Second Floor, New
York, New York, on June 11, 2003, at 4:00 p.m., local time, for the following
purposes:
1. To elect eleven directors, each for a term of one year and until
their successors are duly elected and qualified;
2. To ratify the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the fiscal year ending January 31, 2004;
and
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shares represented by properly executed proxies will be voted in accordance
with the specifications therein. It is the intention of the Board of Directors
that shares represented by proxies, which are not limited to the contrary, will
be voted for the election of those directors named in the attached proxy
statement.
The Board of Directors has fixed the close of business on May 7, 2003 as
the record date for determining shareholders entitled to notice of, and to vote
at, the Annual Meeting and at any adjournment thereof.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING,
PLEASE SIGN, DATE, AND MAIL THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED. IF YOU
ATTEND THE MEETING, YOU MAY VOTE IN PERSON AND YOUR PROXY WILL NOT BE USED.
By Order of the Board of Directors
-s- John S. Mills
JOHN S. MILLS
President, Chief Operating Officer and
Secretary
May 9, 2003
AEROPOSTALE, INC.
1372 BROADWAY, 8TH FLOOR
NEW YORK, NEW YORK 10018
646-485-5398
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 11, 2003
---------------------
PROXY STATEMENT
---------------------
This Proxy Statement is furnished to the stockholders of Aeropostale, Inc.,
a Delaware corporation (the "Company"), in connection with the solicitation by
the Board of Directors of the Company of proxies to be used at the Annual
Meeting of Stockholders to be held on June 11, 2003, at 4:00 p.m., local time,
at the New School University, University Hall, 55 West 13th Street, Second
Floor, New York, New York, and at any adjournment thereof. This Proxy Statement
and the accompanying proxy are being mailed to the stockholders on or about May
9, 2003.
All shares represented by properly executed proxies received by the Company
prior to the meeting will be voted in accordance with the stockholders'
directions. A proxy may be revoked, without affecting any vote previously taken,
by written notice mailed to the Company (Attention: John S. Mills, Secretary) or
delivered in person at the meeting, by filing a duly executed, later dated proxy
or by attending the meeting and voting in person.
Stockholders of record at the close of business on May 7, 2003 are entitled
to notice of and to vote at the Annual Meeting and any adjournment or
adjournments thereof. At April 17, 2003 the Company had outstanding 35,559,771
shares of Common Stock, with $.01 par value, entitled to vote at the Annual
Meeting. Each share of Common Stock entitles the holder thereof to one vote upon
each matter to be voted upon by stockholders at the Annual Meeting.
The presence, in person or by proxy, of a majority of the outstanding
shares of Common Stock of the Company is necessary to constitute a quorum for
the transaction of business at the Annual Meeting. Abstentions and broker
non-votes are counted for purposes of determining the presence or absence of a
quorum. Broker non-votes occur when brokers, who hold their customers' shares in
street name, sign and submit proxies for such shares and vote such shares on
some matters but not others. This would occur when brokers have not received any
instructions from their customers, in which case the brokers, as the holders of
record, are permitted to vote on "routine" matters, which include the election
of directors but not on non-routine matters.
The election of each director nominee requires the favorable vote of a
plurality of all votes cast by the holders of Common Stock at a meeting at which
a quorum is present. Proxies that are marked "Withhold Authority" and broker
non-votes will not be counted toward such nominee's achievement of a plurality
and thus will have no effect. Each other matter to be submitted to the
stockholders for approval at the Annual Meeting requires the affirmative vote of
the holders of a majority of the Common Stock voting on the matter. For purposes
of determining the number of shares of Common Stock voting on the matter,
abstentions will be counted and will have the effect of a negative vote; broker
non-votes will not be counted and thus will have no effect.
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
OWNERSHIP OF COMMON STOCK
The following table shows, as of February 1, 2003, certain information with
regard to the beneficial ownership of the Company's Common Stock by: (i) each
person known by the Company to own beneficially more than 5% of the outstanding
shares of Common Stock; (ii) each of the Company's directors; (iii) each
executive officer named in the summary compensation table below; and (iv) all
directors and executive officers as a group.
<Table>
<Caption>
SHARES
BENEFICIALLY OWNED(1)
----------------------
NUMBER PERCENT
----------- --------
Bear Stearns MB 1998-1999 Pre-Fund, LLC(2).................. 11,735,674 33.24%
383 Madison Avenue
New York, NY 10179
FMR Corp.(3)................................................ 4,077,862 11.55
82 Devonshire Street
Boston, MA 02109
Geiger Family 1999 Irrevocable GST Trust.................... 1,869,804 5.30
166 East 63rd Street
New York, NY 10021
Stephen A. Geiger(4)........................................ 1,990,866 5.64
166 East 63rd Street
New York, NY 10021
Julian R. Geiger(5)......................................... 1,240,475 3.43
John S. Mills(5)............................................ 2,310,454 6.42
Michael J. Cunningham(5).................................... 310,471 *
Christopher L. Finazzo(5)................................... 470,410 1.32
Thomas P. Johnson(5)........................................ 214,507 *
Bodil Arlander.............................................. -- *
Mary Elizabeth Burton(5).................................... 18,816 *
David Edwab................................................. 13,000 *
John D. Howard.............................................. -- *
David Glaser................................................ -- *
Douglas Korn................................................ -- *
Richard Metrick............................................. -- *
Richard Perkal.............................................. -- *
All directors and executive officers as a group (14
persons)(5)............................................... 4,978,922 13.17
</Table>
- ---------------
* Less than 1% of the outstanding shares of common stock.
(1) Unless otherwise indicated, each of the stockholders has sole voting and
dispositive power with respect to the shares of common stock beneficially
owned. The percent is based upon the 35,306,048 shares outstanding as of
February 1, 2003 and the number of shares, if any, as to which the named
person has the right to acquire upon options exercisable within 60 days of
February 1, 2003.
(2) The Bear Stearns Companies Inc., a corporation traded publicly on the New
York Stock Exchange, exercises voting and investment control over these
shares as managing member of the Bear Stearns MB 1998-1999 Pre-Fund, LLC.
(3) Share Ownership for FMR Corp. is given as of December 31, 2002, and was
obtained from a Schedule 13G/A, dated February 13, 2003, filed with the
Securities and Exchange Commission.
2
(4) Includes 1,869,804 shares registered in the name of the Geiger Family 1999
Irrevocable GST Trust of which Stephen A. Geiger is trustee.
(5) Includes the following shares for options exercisable within 60 days of
February 1, 2003:
<Table>
Mr. Geiger.................................................. 911,843
Mr. Mills................................................... 692,820
Mr. Cunningham.............................................. 263,430
Mr. Johnson................................................. 167,466
Mr. Finazzo................................................. 298,051
Ms. Burton.................................................. 18,816
The directors and officers as a group....................... 2,489,410
</Table>
PROPOSAL ONE: ELECTION OF DIRECTORS
GENERAL
Eleven directors will be elected at the 2003 Annual Meeting of Shareholders
for a term of one year and until their successors shall have been duly elected
and qualified. For the purpose of electing directors, each shareholder is
entitled to one vote per share for each of the eleven directors to be elected.
Candidates receiving the highest number of votes will be elected.
The enclosed proxy, if returned duly executed and not revoked, will be
voted as specified in the proxy, or if no instructions are given will be voted
FOR each of the nominees listed below. If any nominee should become unavailable
to serve, the Board of Directors may decrease the number of directors pursuant
to the Bylaws or may designate a substitute nominee, in which event the proxy
will be voted FOR such substitute nominee. The Board has no reason to believe
that any nominee will be unavailable or, if reelected, unable to serve.
NOMINEES
Certain information regarding each nominee and each incumbent director is
set forth below as of April 22, 2003, including age, principal occupation, and a
brief description of business experience during at least the last five years.
Julian R. Geiger, 57, has served as our Chairman and Chief Executive
Officer since August 1998. From 1996 to 1998, he held the position of President
and Chief Executive Officer of Federated Specialty Stores, a division of
Federated Department Stores, Inc., which included Aeropostale. Before joining
Federated, he was President of the Eagle Eye Kids wholesale and retail divisions
of Asian American Partners from 1993 to 1996. Prior to then, Mr. Geiger held a
wide range of merchandising positions from 1975 to 1993 at R.H. Macy & Co.,
Inc., including President of Merchandising for Macy's East responsible for Young
Men's, Juniors, Misses Coats and Misses Swimwear.
John S. Mills, 55, has served as our President and Chief Operating Officer
since February 2000, and as a director since August 1998. He previously served
as our Executive Vice President -- Director of Operations from 1998 to 2000.
From 1994 through 1998 he held positions as Vice President of Operations and
then Senior Vice President of Operations for Federated Specialty Stores. Before
joining the specialty store division of R.H. Macy & Co., Inc. in 1988 as Vice
President of Operations, Mr. Mills held various executive positions with the
Bamberger's division of R.H. Macy & Co., Inc., Abraham & Strauss and M.
Fortunoff's from 1969 until 1988.
Bodil Arlander, 39, has served as a director since August 1998 and
currently is a Senior Managing Director at Bear, Stearns & Co. Inc. and a
principal of Bear Stearns Merchant Banking, a division of Bear Stearns & Co.
Inc., which she joined in April 1997. Between 1991 and 1997, she worked in the
mergers and Acquisitions Group of Lazard Freres & Co. LLC. Prior to entering the
finance industry, Ms. Arlander worked
3
throughout Europe in the fashion and beauty industry. She also currently serves
as a director of several private corporations.
Mary Elizabeth Burton, 51, has served as a director since April 2001 and
currently is the Chairman and Chief Executive Officer of BB Capital, Inc., a
company she founded in 1992 whose services currently include retail turnaround
consulting and interim CEO management. Previously, Ms. Burton served as Chief
Executive Officer of a number of companies including Supercuts, Inc., PIP
Printing and Cosmetic Center, Inc. Ms. Burton also currently serves as a
director of The Sports Authority, Inc., Staples, Inc. and Rent-a-Center.
David Edwab, 48, has served as a director since January 2001 and currently
is the Vice Chairman and Director of The Men's Wearhouse, Inc. From 2000 to
2001, Mr. Edwab was a Senior Managing Director at Bear, Stearns & Co. Inc.,
serving as the Group Head for Retail Investment Banking. Prior to then, he held
several positions at The Men's Wearhouse since 1991 including Treasurer, Chief
Financial Officer, Chief Operating Officer and President. Mr. Edwab is a
certified public accountant and was a partner with Deloitte & Touche and was
responsible for the Southwest Corporate Finance and Retail practice.
John D. Howard, 50, has served as a director since August 1998 and
currently is a Senior Managing Director at Bear, Stearns & Co. Inc. and is head
of Bear Stearns Merchant Banking, a division of Bear, Stearns & Co. Inc. From
1990 to 1997, he was a co-CEO of Vestar Capital Partners, inc., a private
investment firm specializing in management buyouts. Previously, he was a Senior
Vice President of Wesray Capital Corporation, a private investment firm
specializing in leveraged buyouts. Mr. Howard also currently serves as a
director of several private corporations and one publicly traded corporation,
Integrated Circuit Systems, Inc.
David H. Glaser, 46, has served as a director since June 2002 and currently
is a Senior Managing Director and Co-Head of Investment Banking at Bear, Stearns
& Co. Inc. Mr. Glaser joined Bear Stearns in 1985.
Douglas R. Korn, 40, has served as a director since June 2002 and currently
is a Senior Managing Director at Bear, Stearns & Co. Inc. and a principal of
Bear Stearns Merchants Banking, a division of Bear, Stearns Co. Inc. Prior to
joining Bear Stearns in January 1999, Mr. Korn was a Managing Director of Eos
Partners, L.P. a private and public equity investment firm from 1994 through
1998. Currently, Mr. Korn serves as a director of several private corporations.
Richard Metrick, 61, has served as a director since August 1998 and is a
Senior Managing Director at Bear, Stearns & Co. Inc. and a principal of Bear
Stearns Merchants Banking, a division of Bear, Stearns Co. Inc. Prior to joining
Bear Stearns in March 1989, Mr. Metrick served as Chief Financial Officer of
American Bakeries Co. and of Hazeltine Corporation.
Richard L. Perkal, 49, has served as a director since June 2002 and
currently is a Senior Managing Director of Bear, Stearns & Co. Inc. Prior to
joining Bear Stearns in July 2000, Mr. Perkal was a partner in the law firm of
Kirkland & Ellis in Washington DC, where he headed up the corporate
transactional practice primarily focusing on leverage buyouts and
recapitalizations. Mr. Perkal currently serves as a director of several private
corporations.
David B. Vermylen, 52, has served as a director since May 2003. Previously,
Mr. Vermylen had been employed by Keebler Company from 1996 until 2002 and had
served as its Chief Executive Officer and President from 2001. Prior to Keebler,
Mr. Vermylen had held various executive positions at other consumer products
companies.
INFORMATION CONCERNING BOARD OF DIRECTORS
During the fiscal year ended February 1, 2003 ("Fiscal 2002"), the Board of
Directors met four times. The Board has a standing Audit Committee, Compensation
Committee, and Nominating Committee. During Fiscal 2002, each of the Company's
incumbent directors participated in at least 75% of the aggregate number of
meetings of the Board of Directors and meetings of the Board Committee on which
such director was an incumbent member.
Independent directors are paid $2,000 for each Board meeting and $1,000 for
each Committee meeting attended, $1,000 for each telephonic meeting and are
reimbursed for travel expenses relating to attending Board, Committee or Company
business meetings. During Fiscal 2002, independent director Mr. Edwab received a
grant of 10,000 stock options to purchase the common stock of Aeropostale, Inc.
with a one year
4
vesting period and a strike price of $15.55. Mr. Edwab also received an
additional grant of 10,000 stock options with a one year vesting period and a
strike price of $15.55 in recognition of his contributions and service to the
Company.
During fiscal 2003, our independent directors will be paid a $20,000
retainer, $1,000 for each board meeting attended and $500 for each telephonic
meeting. Our Committee chairpersons will be paid a $2,000 retainer, and each
committee member will be paid $500 for each committee meeting attended, $250 for
each telephonic meeting and are reimbursed for travel expenses relating to
attending Board, Committee or Company business meetings. In addition, new
independent directors shall receive 10,000 stock options upon appointment to the
board. Each incumbent independent director is eligible to receive 5,000 stock
options, annually, dependant upon the Company's achievement of financial
targets.
Directors who are employees of the Company or are otherwise not considered
independent do not receive separate compensation for serving as directors.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has an Audit Committee, currently consisting of Mr.
Edwab, Ms. Burton and Mr. Vermylen, each of whom are considered "independent"
under the New York Stock Exchange listing standards. The primary responsibility
of the Audit Committee is to confirm the independence of the Company's auditors
and to review the scope of audit and non-audit services, internal audit
procedures and the adequacy of internal controls. The Audit Committee meets with
management and the Company's independent public accountants. The Audit Committee
met four times during Fiscal 2002. Mr. Vermylen was appointed to the Audit
Committee in May 2003 and therefore did not attend any Audit Committee meetings
that took place in Fiscal 2002.
The Board of Directors also has a Compensation Committee, consisting of
Messrs. Geiger and Howard and a Nominating Committee consisting of Mr. Geiger,
Mr. Howard and Mr. Edwab. The primary responsibility of the Compensation
Committee is to establish compensation and incentives for the Company's
executive officers and to administer the Company's incentive compensation and
benefit plans, including the Company's 1998 Stock Option Plan and 2002 Long-Term
Incentive Plan. The Compensation and Nominating Committee met informally, either
in person or by phone, on a number of occasions during Fiscal 2002, with formal
actions being taken by written consent.
PROPOSAL TWO: RATIFICATION OF INDEPENDENT AUDITORS
Deloitte & Touche LLP were the Company's independent auditors for Fiscal
2002 and have reported on the Company's consolidated financial statements
included in the annual report which accompanies this proxy statement. The
independent auditors are appointed by the Audit Committee. The Audit Committee
has reappointed Deloitte & Touche LLP as independent auditors for fiscal 2003.
In the event that the shareholders do not ratify the reappointment of Deloitte &
Touche LLP as independent auditors, the selection of independent auditors will
be reconsidered by the Audit Committee. A representative of Deloitte & Touche
LLP will be present at the annual meeting, will have an opportunity to make a
statement and will be available to respond to appropriate questions.
5
EXECUTIVE OFFICERS
The following is a list of the Company's executive officers, followed by
their biographical information (other than for Mr. Geiger and Mr. Mills, whose
biographical information appears under "Election of Directors -- Nominees").
<Table>
<Caption>
EXECUTIVE OFFICER AGE POSITION
- ----------------- --- --------
Julian R. Geiger..................... 57 Chairman and Chief Executive Officer
John S. Mills........................ 55 President and Chief Operating Officer
Michael J. Cunningham................ 45 Chief Financial Officer
Christopher L. Finazzo............... 47 Chief Merchandising Officer
Thomas P. Johnson.................... 44 Director of Stores
Laura W. Moran....................... 53 Director of Human Resources
</Table>
Michael J. Cunningham has served as our Senior Vice President -- Chief
Financial Officer since August 2000. He previously served as Chairman and
Co-Founder of Compass International Services Corporation from 1997 to 1999. He
also held various senior executive positions for American Express Company from
1984 to 1997, including Vice President -- Operations, Vice President -- Finance,
and Director of Corporate Finance. Mr. Cunningham is a Certified Public
Accountant.
Christopher L. Finazzo was promoted to Executive Vice President -- Chief
Merchandising Officer in February 2002 after serving as Senior Vice
President -- General Merchandise Manager from 1999 to February 2002, and as Vice
President, Divisional Merchandise Manager for Aeropostale Men's from 1996 to
1999. From 1994 to 1996, he was President of C&E Marketing and from 1992 to
1994, Director of Merchandise for Shalor Designs. From 1991 to 1992, Mr. Finazzo
was Director of Merchandise for his own company, In the Paint, Inc. Prior to
then, Mr. Finazzo held various merchandise positions with R.H. Macy's & Co.,
Inc. including Sales Manager, Assistant Buyer, Buyer and Administrator.
Thomas P. Johnson rejoined us in January 2001 as our Senior Vice
President -- Director of Stores after having served as Senior Vice President,
Vice President, Regional Manager and District Manager with Federated Specialty
Stores from 1989 to 1996. In the interim, he served as Senior Vice
President -- Director of Stores for David's Bridal, Inc. in 2000 and as Senior
Vice President -- Director of Stores for Brooks Brothers, Inc. from 1997 to
2000. Mr. Johnson also held various field positions at Gap, Inc. as Regional
Manager for Banana Republic, District Manager and Store Manager for Gap, Inc.
from 1981 to 1989.
Laura W. Moran has served as our Senior Vice President -- Director of Human
Resources since August 1998 and previously as Vice President -- Director of
Human Resources with Federated Specialty Stores. Between 1978 and 1998, Mrs.
Moran held several human resources positions with Bamberger's, including
Assistant Store Manager for Sales Support, Personnel Manager for Merchandising
Services, Personnel Manager and Employment Manager.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth the
compensation earned for services rendered to us in all capacities for the fiscal
year ended February 1, 2003, by our Chief Executive Officer and our four next
most highly compensated executive officers who earned more than $100,000 in
salary and bonus during the fiscal year ended February 1, 2003, to whom we refer
in this prospectus collectively as the named executive officers:
6
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
LONG-TERM
COMPENSATION
------------
COMPENSATION SECURITIES
--------------------- UNDERLYING ALL OTHER
PERIOD COVERED SALARY BONUS OPTIONS COMPENSATION(1)
-------------- -------- ---------- ------------ ---------------
Julian R. Geiger............. Fiscal 2002 $600,006 $1,171,150(2) -- $3,675
Chairman and Chief
Executive Officer
John S. Mills................ Fiscal 2002 300,014 1,512,689(2) -- 3,675
President and Chief
Operating Officer
Michael J. Cunningham........ Fiscal 2002 213,269 71,591 -- 3,675
Senior Vice
President -- Chief
Financial Officer
Christopher L. Finazzo....... Fiscal 2002 250,327 171,719 -- --
Executive Vice President --
Chief Merchandising Officer
Thomas P. Johnson............ Fiscal 2002 237,692 150,528 -- 3,675
Senior Vice President --
Director of Stores
</Table>
- ---------------
(1) Represents amounts we paid pursuant to our Medical Reimbursement Executive
Plan.
(2) Included in Mr. Geiger and Mr. Mills' bonus amounts are special bonus
payments related to the consummation of our company's initial public
offering and a special non-contractual performance bonus related to Fiscal
2002 company results. These bonuses totaled $567,739 and $417,404 for Mr.
Geiger and Mr. Mills, respectively.
EMPLOYMENT AGREEMENTS
JULIAN R. GEIGER
We entered into an employment agreement with Julian R. Geiger in 2002 that
will remain effective through the last day of fiscal 2004. Under the agreement
Mr. Geiger currently receives an annual base salary of $600,000, an annual
incentive bonus and medical and other benefits. Mr. Geiger's annual bonus is
equal to the product of the percentage increase in our consolidated net income
for the particular fiscal year represented as a whole number, a fixed percentage
and Mr. Geiger's then applicable base salary. If there is no percentage increase
in consolidated net income or if Mr. Geiger's calculated bonus is less than his
then applicable base salary for the given fiscal year, but our consolidated net
income exceeds $51 million in fiscal 2003, Mr. Geiger will be entitled to an
annual bonus equal to his then applicable base salary. For fiscal 2004, if there
is no percentage increase in consolidated net income or if Mr. Geiger's annual
bonus, calculated as described above, is less than his then applicable base
salary, but our consolidated net income exceeds $63 million, then Mr. Geiger
will be entitled to an annual bonus equal to his then applicable base salary.
Mr. Geiger's annual bonus is capped at three and one-half times his base salary
for Fiscal 2002 and three times his base salary for fiscal 2003 and Fiscal 2004.
If we terminate Mr. Geiger's employment without cause, if Mr. Geiger
resigns his position as a consequence of a material reduction of his
responsibilities, movement of our headquarters more than twenty-five miles from
its present location, a material breach of our agreements with him, if he is
removed, without cause, or not re-elected to our Board of Directors or the
offices of Chairman of the Board and Chief Executive Officer of our company, or
if he resigns within six months of a change of control of our company, he will
be entitled to receive the lesser of his base salary for the remainder of the
term of the employment agreement or his then applicable base salary and the pro
rata portion of the annual bonus he would have received had he been employed by
our company for the full fiscal year.
If Mr. Geiger's employment with our company terminates for any of the
reasons outlined in the preceding paragraph, he will be restricted from engaging
in competitive activities and soliciting employees until the last day of fiscal
2005 if his employment with our company terminates prior to the end of fiscal
2003 or if his
7
employment terminates before the end of fiscal 2004, this restriction is
effective until the earlier of his date of termination or July 31, 2005.
JOHN S. MILLS
We entered into an employment agreement with John S. Mills in 2002 that
will remain effective through the last day of fiscal 2003. Under the agreement
Mr. Mills currently receives an annual base salary of $400,000, an annual
incentive bonus and medical and other benefits. Mr. Mills' annual bonus is equal
to the product of the percentage increase in our consolidated net income for the
particular fiscal year represented as a whole number, a fixed percentage and Mr.
Mills' then applicable base salary. If there is no percentage increase in
consolidated net income or if Mr. Mills' calculated bonus is less than his then
applicable base salary for the given fiscal year, but our consolidated net
income exceeds $51 million in fiscal 2003, Mr. Mills will be entitled to an
annual bonus equal to his then applicable base salary. Mr. Mills' annual bonus
is capped at one and one quarter of his base salary for fiscal 2003.
If we terminate Mr. Mills' employment without cause, if Mr. Mills resigns
his position as a consequence of a material reduction of his responsibilities,
movement of our headquarters more than twenty-five miles from its present
location, a material breach of our agreements with him, if he is removed,
without cause, or not re-elected to our Board of Directors or the offices of
President and Chief Operating Officer of our company, or if he resigns within
six months of a change of control of our company, he will be entitled to receive
the lesser of his base salary for the remainder of the term of the employment
agreement or his then applicable base salary and the pro rata portion of the
annual bonus he would have received had he been employed by our company for the
full fiscal year.
If Mr. Mills' employment with our company terminates for any of the reasons
outlined in the preceding paragraph, he will be restricted from engaging in
competitive activities until the earlier of the first anniversary of the
termination date or July 31, 2004. Mr. Mills may not solicit employees until one
year after the expiration of the restricted period.
CHRISTOPHER L. FINAZZO
We entered into an employment agreement with Christopher L. Finazzo in 2002
that will remain effective through the last day of fiscal 2004. Under the
agreement Mr. Finazzo currently receives an annual base salary of $300,000, an
annual incentive bonus and medical and other benefits. Mr. Finazzo's annual
bonus is equal to the product of the percentage increase in our consolidated net
income for the particular fiscal year represented as a whole number, a fixed
percentage and Mr. Finazzo's then applicable base salary. If there is no
percentage increase in consolidated net income, Mr. Finazzo shall not be
entitled to an annual bonus. Mr. Finazzo's annual bonus is capped at two and
one-half times his base salary for fiscal 2002 and two times his base salary for
fiscal 2003 and fiscal 2004.
If we terminate Mr. Finazzo's employment without cause, if Mr. Finazzo
resigns his position as a consequence of a material reduction of his
responsibilities, movement of our headquarters more than twenty-five miles from
its present location, a material breach of our agreements with him or if he is
removed without cause, he will be entitled to receive the lesser of his base
salary for the remainder of the term of the employment agreement or his then
applicable base salary and the pro rata portion of the annual bonus he would
have received had he been employed by our company for the full fiscal year.
If Mr. Finazzo's employment with our company terminates for any of the
reasons outlined in the preceding paragraph, he will be restricted from engaging
in competitive activities and soliciting employees until the last day of fiscal
2005 if his employment with our company terminates prior to the end of fiscal
2003 or if his employment terminates before the end of fiscal 2004, this
restriction is effective until the earlier of his date of termination or July
31, 2005.
STOCK OPTIONS
During the fiscal year ended February 1, 2003, we did not grant any options
to purchase our Common Stock to any of the executive officers named in the
summary compensation table above.
8
AGGREGATE OPTION EXERCISES DURING LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following tables set forth information with respect to the named
executive officers concerning option exercises for the fiscal year ended
February 1, 2003 and exercisable and unexercisable options held as of February
1, 2003. The value of unexercised in-the-money options at February 1, 2003 is
based on the fair market value of our common stock which was the closing price
on January 31, 2003 of $12.15 per share, minus the per share exercise price,
multiplied by the number of shares underlying the option.
<Table>
<Caption>
FISCAL YEAR ENDED
FEBRUARY 1, 2003 NUMBER OF SECURITIES VALUE OF UNEXERCISED
----------------------- UNDERLYING OPTIONS IN-THE-MONEY OPTIONS
SHARES AT FEBRUARY 1, 2003 AT FEBRUARY 1, 2003
ACQUIRED ON VALUE --------------------------- ---------------------------
EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- --------- ----------- ------------- ----------- -------------
Julian R. Geiger........... 62,470 1,043,874 911,843 -- $11,017,901 --
John S. Mills.............. 237,839 3,855,848 692,820 -- 8,371,982 --
Michael J. Cunningham...... -- -- 263,430 -- 3,084,953 --
Christopher L. Finazzo..... -- -- 298,051 -- 3,484,562 --
Thomas P. Johnson.......... 47,041 769,120 167,466 -- 1,957,282 --
</Table>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of our board of directors serves, and we anticipate that no
member of our compensation committee will serve, as a member of the board of
directors or compensation committee of any entity that has one or more executive
officers serving as a member of our board of directors or compensation
committee.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
We maintain a supplemental executive retirement plan, or SERP, which is an
unfunded defined benefit plan. The actuarial present value of accumulated
benefit obligations related to our SERP approximated $3.0 million at February 1,
2003, $2.6 million at February 2, 2002, and $2.5 million at August 4, 2001,
using a weighted average discount rate of 6.75% for the year ended February 1,
2003 and 7% for the other periods, and an assumed rate of compensation increase
of 4.5% for all periods. Pension expense for the SERP amounted to $285,000 in
the year ended February 1, 2003, $133,000 in the six months ended February 2,
2002, $247,000 in fiscal 2001, and $171,000 in fiscal 2000. Of these amounts,
$182,000 represented interest, $2,000 represented amortization of prior
experienced losses, and $101,000 represented the current period service
component for the year ended February 1, 2003. $86,000 represented interest,
$2,000 represented amortization of prior experienced losses, and $45,000
represented the current period service component for the six months ended
February 2, 2002, $155,000 represented interest, $3,000 represented amortization
of prior experienced losses, and $89,000 represented the current year service
component for fiscal 2001 and $101,000 represented interest, ($10,000)
represented amortization of prior experienced gains, and $80,000 represented the
current year service component for fiscal 2000.
The following table illustrates, for representative average pensionable
compensation and years of benefit service classifications, the annual retirement
benefit that would be payable to an employee under our SERP if such employee
retired on December 31, 2001 at age 65, based on the straight-life annuity form
of payment. The annual retirement benefit amounts incorporate an offset factor
included in our SERP's benefit formula of a percentage of the employee's
estimated Social Security benefit, and are calculated based on the employee's
highest average pay during any five years within the ten-year period prior to
retirement. Our SERP provides that a maximum of 30 years of benefit service may
be credited to a participant. The number of years of benefit service that have
been credited to our named executive officers, as of December 31, 2002, are 29
years for Mr. Geiger, 30 years for Mr. Mills, 14 years for Mr. Finazzo and 28
years for Mrs. Moran. Mr. Cunningham and Mr. Johnson do not participate in our
SERP. The benefit amounts set forth in the following table are subject to
further offsets attributable to benefits accrued as of July 31, 1998 under the
Supplementary Executive Retirement Plan of Federated Department Stores, Inc. and
the Federated Department Stores'
9
pension plan in the following annual amounts: Mr. Geiger -- $97,680; Mr.
Mills -- $78,996; Mr. Finazzo -- $4,560; and Mrs. Moran -- $38,016.
PENSION PLAN TABLE(1)
<Table>
<Caption>
YEARS OF SERVICE
----------------------------------------------------
REMUNERATION 15 20 25 30 35(2)
- ------------ -------- -------- -------- -------- --------
$ 125,000.............................. $ 18,100 $ 24,100 $ 30,200 $ 36,200 $ 36,200
150,000.............................. 23,200 31,000 38,700 46,400 46,400
175,000.............................. 28,300 37,800 47,200 56,700 56,700
200,000.............................. 33,500 44,600 55,800 66,900 66,900
225,000.............................. 38,600 51,400 64,300 77,100 77,100
250,000.............................. 43,700 58,200 72,800 87,400 87,400
300,000.............................. 53,900 71,900 89,800 107,800 107,800
400,000.............................. 74,400 99,200 123,900 148,700 148,700
450,000.............................. 84,600 112,800 141,000 169,200 169,200
500,000.............................. 94,800 126,400 158,000 189,600 189,600
600,000.............................. 115,300 153,700 192,100 230,600 230,600
750,000.............................. 146,000 194,600 243,300 291,900 291,900
1,000,000.............................. 197,100 262,800 328,500 394,200 394,200
</Table>
- ---------------
(1) The table reflects the Social Security benefit offset factor, but does not
incorporate offsets due to benefits accrued under Federated's Supplementary
Executive Retirement Plan.
(2) The maximum length of benefit service that may be credited to a participant
under the plan is 30 years.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers, directors and persons who are beneficial owners of more than ten
percent of the Company's Common Stock ("reporting persons") to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Reporting persons are required by Securities and Exchange Commission regulations
to furnish the Company with copies of all Section 16(a) forms filed by them.
Based on its review of the copies of Section 16(a) forms received by it, the
Company believes that, during Fiscal 2002, all reporting persons complied with
applicable filing requirements, except that one Form 3 for Douglas Korn, one
Form 3 for David Glaser and one Form 3 for Richard Perkal were inadvertently not
filed on a timely basis.
REPORT OF THE COMPENSATION COMMITTEE
To: The Board of Directors
As members of the Compensation Committee, we are responsible for
administering the Company's incentive plans, including the 1998 Stock Option
Plan and 2002 Long-Term Incentive Plan. In addition, we review compensation
levels of members of senior management, evaluate the performance of senior
management and consider management succession and related matters. The
Compensation Committee reviews compensation for the executive officers of the
Company with the Board.
OVERALL COMPENSATION POLICIES
The primary compensation policy of the Company, which is endorsed by the
Compensation Committee, is that a significant portion of the compensation of
each executive officer should be based upon the financial performance of the
Company and the contribution to that performance made by the executive officer.
Thus, a significant portion of the compensation for each executive officer is
"at risk." The Company and the
10
Compensation Committee also believe that executive compensation should serve to
attract and retain key employees and provide them with incentives to assist the
Company in achieving strategic and financial goals that ultimately enhance the
value of the Company's stock. To further these goals, the Company's compensation
structure for executive officers has three components:
- Long-Term Incentive Awards
- Annual Bonus
- Base Salary
The awards, bonus and base salary for the Company's Chief Executive Officer
are determined and approved by the Compensation Committee. The awards, bonus and
base salary for the other executive officers of the Company are recommended by
the Chief Executive Officer, subject to review, adjustment and approval by the
Compensation Committee.
Long-Term Incentive Awards. The Company from time to time provides
long-term incentives to key employees through the grant of stock options under
the 1998 Stock Option Plan and 2002 Long-Term Incentive Plan. These long-term
incentives are designed to couple the interests of key employees with those of
shareholders in that the potential realizable value of the awards is directly
related to the future value of the Company's stock. Stock options typically vest
over a four-year period.
Annual Bonus. Annual bonuses allow the Company to recognize individual
performance and contributions to the Company on an annual basis. We have
employment agreements with each of Mr. Geiger, Mr. Mills and Mr. Finazzo,
pursuant to which their annual bonuses are calculated based on specific
objective performance criteria. Annual bonuses for Fiscal 2002 for other
executives were determined by the Compensation Committee based on achieving
certain financial results and other discretionary factors.
Base Salary. The Compensation Committee determines base salaries for the
Company's other executive officers, as well as changes in such salaries, based
upon recommendations of the Chief Executive Officer. Base salaries are
determined based on factors such as market compensation practices and a
subjective determination of past performance and expected future contributions.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Julian R. Geiger, Chief Executive Officer and Board Chairman earned
$600,000 in base salary for Fiscal 2002, per contractual obligation. Mr.
Geiger's contract with the Company states that Mr. Geiger will earn the same
base pay in the twelve months ended, January 2004 and the twelve months ended
January 2005. In setting the Chief Executive Officer's base salary, the
committee considered company objectives, market and corporate challenges and
market compensation practices.
Julian R. Geiger earned an annual bonus totalling approximately $1.2
million. Included in this total is an approximate $0.6 million bonus related to
the consummation of our IPO and a special non-contractual performance bonus
related to the Company's performance for Fiscal 2002. Mr. Geiger's contractual
bonus calculation reflects our philosophy of meeting and exceeding certain
corporate financial targets. His bonus is based upon achieving certain financial
results as defined in his employment agreement.
Mr. Geiger personally owns 328,632 shares of Aeropostale, Inc. Common
Stock. Through the Aeropostale, Inc. 1998 Stock Option Plan, Mr. Geiger
possesses 870,823 options to purchase shares of Aeropostale, Inc. Common Stock
at a strike price of $0.03 per share and 41,020 options to purchase shares of
Aeropostale, Inc. Common Stock, at a strike price of $0.85.
These grants tie the Chief Executive Officer's long term compensation to
the goals of increasing shareholder value and including at-risk compensation as
a major portion of the executive's compensation.
CONCLUSION
The Compensation Committee has reviewed each element of compensation for
each of the executive officers for Fiscal 2002. The Compensation Committee
reported to the Board of Directors that in the
11
Compensation Committee's opinion, the compensation of each executive officer is
reasonable in view of the Company's performance and the Compensation Committee's
subjective evaluation of the contribution of each executive officer to that
performance.
April 28, 2003
COMPENSATION COMMITTEE
Julian R. Geiger
John D. Howard
AUDIT COMMITTEE INDEPENDENCE
The Company's Audit Committee consists of David Edwab, Mary Elizabeth
Burton, and David B. Vermylen. Mr. Vermylen was appointed to the Audit Committee
in May 2003 and therefore he did not participate in the review of our Fiscal
2002 audited financial statements, the Audit Committee's recommendation to our
Board of Directors that such statements be included in our annual report on Form
10-K or any other matters set forth below in the report of the Audit Committee.
No member of the Audit Committee is either an officer or employee of the
Company. The members of the Audit Committee are independent as defined in the
New York Stock Exchange listing standards.
THE FOLLOWING REPORT OF THE AUDIT COMMITTEE AND THE PERFORMANCE GRAPH THAT
APPEARS IMMEDIATELY AFTER SUCH REPORT SHALL NOT BE DEEMED TO BE SOLICITING
MATERIAL OR TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE
SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934 OR INCORPORATED BY
REFERENCE IN ANY DOCUMENT SO FILED. REPORT OF THE AUDIT COMMITTEE"
REPORT OF THE AUDIT COMMITTEE
To: The Board of Directors
As members of the Audit Committee, we are responsible for oversight of all
aspects of the Company's financial reporting, internal control and audit
functions. We adopted a charter in May 2002, which is attached to this Proxy
Statement as Appendix A. Management has the primary responsibility for the
financial statements and the reporting process, including the systems of
internal controls. We have reviewed and discussed the Company's financial
statements with management.
We selected Deloitte & Touche, LLP to be the Company's independent
auditors, and they are responsible for expressing an opinion on the conformity
of the audited financial statements in the Annual Report for fiscal 2002. We
have received written confirmation from Deloitte & Touche, LLP of their
independence within the meaning of the Securities Act administered by the
Securities and Exchange Commission and the requirements of the Independence
Standards Board Standard No. 1 and have discussed Deloitte & Touche, LLP's
independence. We have discussed with Deloitte & Touche, LLP those matters
required by Statement on Auditing Standards No. 61.
12
In reliance on the reviews and discussions noted above, we recommended to
the Board of Directors that the audited financial statements be included in the
Company's annual report on Form 10-K for the year ended February 1, 2003 for
filing with the Securities and Exchange Commission.
April 28, 2003
AUDIT COMMITTEE
David Edwab
Mary Elizabeth Burton
FEES PAID TO INDEPENDENT AUDITORS
AUDIT FEES
The aggregate fees billed for professional services rendered by Deloitte &
Touche LLP for the audit of the Company's annual financial statements and the
reviews of the financial statements included in the Company's Form 10-Qs for
such fiscal year were approximately $268,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
No fees were billed for professional services rendered by Deloitte & Touche
LLP for financial systems design and implementation services for the fiscal year
ended February 1, 2003.
ALL OTHER FEES
The aggregate fees for professional services rendered by Deloitte & Touche
LLP other than the services referred to above were approximately $1,178,000
during the fiscal year ended February 1, 2003. These services primarily
consisted of tax related services, fees related to our initial public offering
and the audit of our employee Benefit Plan. The Audit Committee considered
whether the provision of these services is compatible with maintaining the
independence of Deloitte & Touche LLP.
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of February 1, 2003 about our
common stock that may be issue upon the exercise of options, warrants and rights
granted to employees, consultants or members of our Board of Directors, under
our two existing equity compensation plans, the Aeropostale, Inc. 1998 Stock
Option Plan and Aeropostale, Inc. 2002 Long-Term Incentive Plan.
<Table>
<Caption>
NUMBER OF SECURITIES TO BE ISSUED WEIGHTED AVERAGE EXERCISE NUMBER OF SECURITIES REMAINING
UPON EXERCISE OF OUTSTANDING PRICE OF OUTSTANDING OPTIONS, AVAILABLE FOR FUTURE ISSUANCE
PLAN CATEGORY OPTIONS, WARRANTS AND RIGHTS WARRANTS AND RIGHTS UNDER EQUITY COMPENSATION PLANS
- ------------- --------------------------------- ----------------------------- -------------------------------
Equity Compensation
Plans Approved by
Security Holders... 4,155,869 $0.36 1,781,413
Equity Compensation
Plans not Approved
by Security
Holders............ -- -- --
--------- ----- ---------
Total................ 4,155,869 $0.36 1,781,413
========= ===== =========
</Table>
13
PERFORMANCE GRAPH
The following graph shows the changes, for the period commencing May 16,
2002 and ended January 31, 2003 (the last trading day during the Company's 2002
fiscal year), in the value of $100 invested in shares of Common Stock of the
Company, the Standard & Poor's MidCap 400 Composite Stock Price Index (the "S&P
MidCap 400 Index") and the Standard & Poor's Apparel Retail Composite Index (the
"S&P Apparel Retail Index"). The plotted points represent the closing price on
the last trading day of the fiscal year indicated.
<Table>
<Caption>
AEROPOSTALE INC. S&P APPAREL RETAIL S&P 400
---------------- ------------------ -------
May-02 100 100 100
Jul-02 51 78 74
Oct-02 45 80 83
Jan-03 44 79 78
</Table>
<Table>
<Caption>
- --------------------------------------------------------------------------------
MAY-02 JUL-02 OCT-02 JAN-03
- --------------------------------------------------------------------------------
Aeropostale Inc. $100 $51 $45 $44
S&P Apparel Retail $100 $78 $80 $79
S&P 400 $100 $74 $83 $78
</Table>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We lease a number of our stores from the Simon Property Group, L.P., an
affiliate of SI-MSSD, LLC, which has been one of our stockholders since October
1998. Our leases with Simon Property Group typically last ten years. Under these
leases, we generally pay a fixed amount of rent monthly plus a small percentage
of these store's gross sales. In most cases, we have the right to terminate
these leases if the store's gross sales do not meet an agreed upon level. In
many cases, in lieu of termination, we may elect to continue the lease at a
reduced monthly rent. During Fiscal 2002 SI-MSSD, LLC ceased to be a 5%
stockholder and therefore is no longer considered a related party.
SOLICITATION OF PROXIES
Solicitation of the proxies may be made through officers and regular
employees of the Company by telephone or by oral communications with some
stockholders following the original solicitation period. No additional
compensation will be paid to such officers and regular employees for proxy
solicitation. Expenses incurred in the solicitation of proxies will be borne by
the Company, including the charges and expenses of brokerage firms and others of
forwarding solicitation material to beneficial owners of Common Stock. In
addition to use of the mails, proxies may be solicited by officers and employees
of the Company in person or by
14
telephone. The Company has no present plans to hire special employees or paid
solicitors to assist in obtaining proxies, but reserves the option of doing so
if it should appear that a quorum might otherwise not be obtained or for
solicitation of proxies in connection with any of the proposed matters.
OTHER MATTERS
Management does not know of any other matters to be presented at the Annual
Meeting, but should any other matters requiring a vote of shareholders arise,
including a question of adjourning the meeting, the persons named in the
accompanying proxy will vote thereon according to their best judgment.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 2004 Annual Meeting
of Shareholders of the Company must be received by January 10, 2004 for
inclusion in the Company's 2004 Proxy Statement. In addition, the Company's
Bylaws establish an advance notice procedure with regard to certain matters,
including shareholder proposals not included in the Company's Proxy Statement,
to be brought before an annual meeting of shareholders. In general, notice must
be received by the Secretary of the Company at the Company's principal executive
office not less than 60 days or more than 90 days prior to the scheduled annual
meeting, regardless of any postponements, deferrals or adjournments of that
meeting unless less than 70 days notice or prior public disclosure of the date
scheduled for the meeting is given or made, in which event notice by the
shareholder to be timely must be delivered or received not later than the close
of business on the tenth day following the earlier of (i) the day on which such
notice of the date of the scheduled annual meeting was mailed or (ii) the day on
which such public disclosure was made.
15
EXHIBIT A
AEROPOSTALE, INC.
AUDIT COMMITTEE CHARTER
ORGANIZATION
There shall be a committee of the board of directors of Aeropostale, Inc.
(the "Corporation"), to be known as the audit committee. The audit committee
shall be composed of directors who are independent of the management of the
Corporation and are free of any relationship that, in the opinion of the board
of directors, would interfere with their exercise of independent judgment as a
committee member.
STATEMENT OF POLICY
The audit committee shall provide assistance to the corporate directors in
fulfilling their responsibility to the shareholders, potential shareholders and
investment community relating to corporate accounting, reporting practices of
the Corporation, and the quality and integrity of the financial reports of the
Corporation. In so doing, it is the responsibility of the audit committee to
maintain free and open means of communication between the directors, independent
auditors, internal auditors, and financial management of the Corporation.
RESPONSIBILITIES
In carrying out its responsibilities, the audit committee believes its
policies and procedures should remain flexible, in order to best react to
changing conditions and to ensure to the directors and shareholders that the
corporate accounting and reporting practices of the Corporation are in
accordance with all requirements and are of the highest quality.
In carrying out these responsibilities, the audit committee will:
- Review and recommend to the directors the independent auditors to be
selected to audit the financial statements of the Corporation and its
divisions and subsidiaries.
- Meet with the independent auditors and financial management of the
Corporation to review the scope of the proposed audit for the current
year and the audit procedures to be utilized, and at the conclusion
thereof review such audit, including any comments or recommendations of
the independent auditors.
- Review with the independent auditors, the Corporation's internal auditor,
and financial and accounting personnel, the adequacy and effectiveness of
the accounting and financial controls of the Corporation, and elicit any
recommendations for the improvement of such internal control procedures
or particular areas where new or more detailed controls or procedures are
desirable. Particular emphasis should be given to the adequacy of such
internal controls to expose any payments, transactions, or procedures
that might be deemed illegal or otherwise improper. Further, the
committee periodically should review Corporation policy statements to
determine their adherence to the code of conduct.
- Review the internal audit function of the Corporation including the
independence and authority of its reporting obligations, the proposed
audit plans for the coming year, and the coordination of such plans with
the independent auditors.
- Receive prior to each meeting, a summary of findings from completed
internal audits and a progress report on the proposed internal audit
plan, with explanations for any deviations from the original plan.
- Review the financial statements contained in the annual report to
shareholders with management and the independent auditors to determine
that the independent auditors are satisfied with the disclosure and
content of the financial statements to be presented to the shareholders.
Any changes in accounting principles should be reviewed.
- Provide sufficient opportunity for the internal and independent auditors
to meet with the members of the audit committee without members of
management present. Among the items to be discussed in these
A-1
meetings are the independent auditors' evaluation of the Corporation's
financial, accounting, and auditing personnel, and the cooperation that
the independent auditors received during the course of the audit.
- Review accounting and financial human resources and succession planning
within the Corporation.
- Submit the minutes of all meetings of the audit committee to, or discuss
the matters discussed at each committee meeting with, the board of
directors.
- Investigate any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for this purpose if, in
its judgment, that is appropriate.
A-2
AEROPOSTALE, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COMPANY FOR ANNUAL MEETING, JUNE 11, 2003
The undersigned, a shareholder of Aeropostale, Inc., a Delaware corporation (the
"Company"), acknowledges receipt of a copy of the Notice of Annual Meeting of
Shareholders, the accompanying Proxy Statement and the Annual Report to
Shareholders for the fiscal year ended February 1, 2003; and, revoking any proxy
previously given, hereby constitutes and appoints Julian R. Geiger, John S.
Mills and Michael J. Cunningham, and each of them, his or her true and lawful
agents and proxies with full power of substitution in each, to vote the shares
of Common Stock of the Company standing in the name of the undersigned at the
Annual Meeting of Shareholders of the Company to be held at the New School
University, University Hall, 55 West 13th Street, Second Floor, New York, New
York, on June 11, 2003, at 4:00 p.m. local time, and at any adjournment thereof,
on all matters coming before said meeting.
MAIL
- Mark, sign and date your proxy card.
- Detach your proxy card.
- Return your proxy card in the postage paid envelope
provided.
[Image Omitted - (ARROW)] DETACH PROXY CARD HERE [Image Omitted - (ARROW)]
1. BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1.
ELECTION OF DIRECTORS: [Image Omitted FOR all
- (BOX)] nominees
[Image Omitted WITHHOLD AUTHORITY to
- (BOX)] vote for all nominees
Nominees: 01 Julian R. Geiger, 02 John S. Mills, 03 Bodil Arlander, 04 Mary
Elizabeth Burton, 05 David Edwab, 06 John D. Howard, 07 David Glaser, 08 Douglas
Korn, 09 Richard Metrick, 10 Richard Perkal, 11 David B. Vermylen
(AUTHORITY TO VOTE FOR ANY NOMINEE NAMED MAY BE WITHHELD BY LINING THROUGH THAT
NOMINEE'S NAME.)
2. RATIFICATION OF INDEPENDENT AUDITORS
Ratification of the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the fiscal year ending January 31, 2004
[ ] For [ ] Against [ ] Abstain
3. In their discretion, upon any other matters as may properly come before
the meeting or at any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREBY BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL 1. IF ANY NOMINEE BECOMES UNAVAILABLE FOR ANY REASON, THE PERSONS
NAMED AS PROXIES SHALL VOTE FOR THE ELECTION OF SUCH OTHER PERSON AS THE BOARD
OF DIRECTORS MAY PROPOSE TO REPLACE SUCH NOMINEE.
Dated ,2003
-----------------------------------
Dated ,2003
-----------------------------------
------------------------------------------------
Signature of Shareholder
------------------------------------------------
Signature of Shareholder
This Proxy must be signed exactly as your name
appears hereon. Executors, administrators,
trustees, etc., should give full title, as such.
If the shareholder is a corporation, a duly
authorized officer should sign on behalf of the
corporation and should indicate his or her
title.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD
PROMPTLY USING THE ENCLOSED ENVELOPE
[Image Omitted
- (ARROW)]
PLEASE DETACH HERE YOU MUST DETACH THIS PORTION OF THE PROXY CARD
BEFORE RETURNING IT IN THE ENCLOSED ENVELOPE
[Image Omitted
- (ARROW)]