SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Lands' End, Inc.
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(Name of Registrant as Specified In Its Charter)
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Notes:
[LANDS' END LOGO]
NOTICE OF 2000 ANNUAL MEETING
AND PROXY STATEMENT
April 24, 2000
Dear Shareholder:
The annual meeting of Lands' End, Inc. shareholders will be held at our
headquarters in Dodgeville, Wisconsin, on Wednesday, May 24, 2000, beginning
at 10:00 a.m. C.D.T. (See map for directions.)
The directors and officers of your company join me in extending you a
cordial invitation to attend.
For those of you interested in seeing, firsthand, how we fill an order,
tours of our facilities will be available before the meeting. The first tour
will leave the activity center at 8:00 a.m. and the last one will leave
promptly at 9:00 a.m.
The agenda for the meeting includes the election of two directors and the
ratification of the appointment of independent public accountants. There also
will be a brief management presentation on the state of the business.
I hope you can be there, but whether you attend the meeting in person or
not, it's important that your shares be represented. To make sure they are,
please mark your votes on the enclosed proxy card and sign, date and mail it
in the postage-paid envelope. It will help us keep postage costs down if you
take a minute to do so now.
/s/ Gary C. Comer
Gary C. Comer
Chairman
[LANDS' END LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 24, 2000
To Our Shareholders:
The annual meeting of shareholders of Lands' End, Inc. (the "Company") will
be held at the offices of the Company, One Lands' End Lane, Dodgeville,
Wisconsin 53595, on May 24, 2000, at 10:00 a.m. C.D.T. for the following
purposes:
1. To elect two members to the Board of Directors of the Company to serve
until the annual meeting of shareholders in 2003, and until their
successors are duly elected and qualified.
2. To ratify the appointment of Arthur Andersen LLP as independent public
accountants for the Company for the fiscal year ending January 26, 2001.
3. To consider and act upon such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 31, 2000,
as the record date for the meeting. All shareholders of record on that date
are entitled to notice of and to vote at the meeting.
Please complete and return the enclosed proxy in the envelope provided
whether or not you intend to be present at the meeting in person.
By order of the Board of Directors,
/s/ Robert S. Osborne
Robert S. Osborne
Secretary
Dodgeville, Wisconsin
April 24, 2000
YOUR VOTE IS IMPORTANT. PLEASE PROMPTLY MARK, DATE, SIGN AND RETURN YOUR
PROXY IN THE ENCLOSED ENVELOPE.
PROXY STATEMENT
Introduction
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Lands' End, Inc., a Delaware corporation (the
"Company"), of proxies to be voted at the 2000 annual meeting of shareholders
on Wednesday, May 24, 2000, and at any adjournment thereof (the "Annual
Meeting"). This Proxy Statement and the accompanying proxy card are being
mailed to shareholders on or about April 24, 2000.
Proxies
Properly signed and dated proxies received by the Company's Secretary prior
to or at the Annual Meeting will be voted as instructed thereon or, in the
absence of such instructions, (a) FOR election to the Board of Directors of
the persons nominated by the Board, (b) FOR the ratification of the
appointment of Arthur Andersen LLP as independent public accountants for the
Company and (c) in accordance with the best judgment of the persons named in
the proxy on any other matters which may properly come before the meeting. Any
proxy may be revoked for any reason prior to voting by notifying the Secretary
of the Company in writing of such revocation or by voting by ballot at the
meeting, which will cancel any proxies previously submitted. The Company has
appointed an officer of Firstar Trust Company, transfer agent for the Company,
to act as an independent inspector at the Annual Meeting.
Voting of Proxies and Shares Outstanding
Holders of record at the close of business on March 31, 2000, of shares of
the Company's common stock, $.01 par value per share (the "Common Stock"), are
entitled to vote on all matters which may be properly presented at the Annual
Meeting. The number of shares of Common Stock of the Company outstanding on
March 31, 2000, the record date for the meeting, was 30,209,440 all of one
class and each entitled to one vote, owned by 2,048 shareholders of record.
The holders of at least a majority of the shares of Common Stock must be
present in person or by proxy at the Annual Meeting in order for the Annual
Meeting to be held. Directors will be elected by a plurality of the votes cast
for the election of directors. The affirmative vote of the holders of a
majority of the shares of Common Stock present and entitled to vote at the
Annual Meeting is required for approval of each of the other actions proposed
to be taken at the Annual Meeting. On each such proposed action, pursuant to
Delaware law, abstentions are treated as present and entitled to vote and thus
have the effect of a vote against a proposed action. A broker non-vote (where
a broker submits a proxy but does not have authority to vote a customer's
shares on one or more matters) on a proposed action is considered not entitled
to vote on that action and thus is not counted in determining whether an
action requiring approval of a majority of the shares present and entitled to
vote at the Annual Meeting has been approved.
ELECTION OF DIRECTORS
The Board of Directors is composed of seven directors. The directors are
divided into three classes, two of which are composed of two directors each,
and one of which is composed of three directors. One class is elected each
year for a three year term. The two nominees for election as directors to
serve until the annual meeting of shareholders in 2003, and until their
respective successors are duly elected and qualified, are Richard C. Anderson
and Howard G. Krane. The Board of Directors recommends that shareholders vote
"FOR" the election of Messrs. Anderson and Krane.
The following tabulation sets forth, as of March 31, 2000, certain
information about each nominee for election to the Company's Board of
Directors and each continuing director.
Director Nominees for a Term to Expire in 2003
Richard C. Anderson Age: 70
Vice Chairman of the Company since 1984. Mr. Anderson served as Chief
Executive Officer of the Company from 1990 through January 1993. In
addition, Mr. Anderson served as President and Chief Operating Officer from
1989 until 1992. He has been a director of the Company since 1979. From
1977 to 1984, Mr. Anderson was a senior executive of Needham, Harper &
Steers, serving as Executive Vice President in charge of programming and
media from 1981 until 1984. Mr. Anderson provides certain services to the
Company and is compensated for such services. See "Meetings and
Compensation of Directors; Committees of the Board."
Howard G. Krane Age: 66
Director of the Company since 1986. Mr. Krane's professional corporation is
a partner of Kirkland & Ellis, with which he has practiced law since 1957.
Kirkland & Ellis renders legal services to the Company. Mr. Krane is also a
member of the Board of Trustees of the University of Chicago and served as
its Chairman from April 1992 until June 1999.
Directors Whose Term Expires in 2001
John N. Latter Age: 74
Director of the Company since 1978. Since 1980, Mr. Latter has been
independently employed as a financial consultant.
Daniel Okrent Age: 52
Director of the Company since October 1997. Mr. Okrent has been Editor-at-
Large for Time, Inc., New York, since March 1999. He served as editor of
new media for Time, Inc., New York, from December 1996 until March 1999,
after serving four years as managing editor of Life. Prior to 1991, Mr.
Okrent was editor at Alfred A. Knopf, Inc. and Viking Press and editor-in-
chief at Harcourt Brace Jovanovich.
Directors Whose Term Expires in 2002
Gary C. Comer Age: 72
Founder of the Company and Chairman of the Board of Directors. Mr. Comer
was President of the Company from 1963 until 1989, and served as Chief
Executive Officer from 1963 until 1990. He has been a director of the
Company since 1963. Prior to 1963, Mr. Comer was employed for ten years as
a copywriter at Young & Rubicam.
David F. Dyer Age: 50
President, Chief Executive Officer and Member of the Board of Directors
since rejoining the Company in October 1998. In 1989, Mr. Dyer entered the
employ of the Company as Managing Director of Home Furnishings, became
Executive Vice President of Merchandising in 1990, and was named Vice
Chairman, Merchandising and Sales in 1993. He was a director of the Company
from 1991 until August 1994. Mr. Dyer was president and chief operating
officer of the Home Shopping Network from August 1994 until August 1995, at
which time he became an independent catalog/retail consultant, most
recently with the Texas Pacific Group and the J. Crew Group. From 1972 to
1989, Mr. Dyer was employed at Burdine's, a specialty retail chain, where
he served as Senior Vice President of Marketing and General Merchandising
Manager of Women's Apparel, Accessories and Cosmetics. Mr. Dyer is also a
director of ADVO, Inc., a direct mail marketing services company.
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David B. Heller Age: 69
Director of the Company since 1986. Since 1974, Mr. Heller has been
President of Advisory Research, Inc., an investment advisory firm.
MEETINGS AND COMPENSATION OF DIRECTORS
The Board of Directors held six formal meetings during the fiscal year
ended January 28, 2000. All directors attended at least 75% of the total
number of meetings of the Board and Committees of which they were members.
Until May 1997, Directors who were not salaried officers or employees of the
Company were eligible to receive an annual retainer of $25,000 in cash of
which they could irrevocably elect to defer receipt during which time the
deferred amount would be adjusted to reflect the performance of the Company's
Common Stock. The Company's Non-Employee Director Stock Option Plan (the
"DSOP"), which was adopted by the Board of Directors on February 18, 1997 and
approved by the shareholders on May 14, 1997, replaced the annual retainer. In
addition, the reasonable expenses incurred by each director in connection with
his duties as a director are reimbursed by the Company. Directors who are
salaried officers or employees of the Company earn no additional compensation
for their services as directors.
In August 1999, the Board of Directors appointed a committee to address the
compensation of non-employee directors. The committee worked with an
independent compensation consulting firm to review the Company's compensation
levels in light of market practices and the Company's desire to retain and
attract the highest caliber of non-employee directors. Based on that review,
in December 1999, the Board of Directors authorized the payment of cash
compensation to non-employee directors at the rate of $20,000 per year,
commencing with fiscal 2001. This payment is in addition to the stock option
grants provided under the DSOP. Upon the recommendation of the committee, the
Board of Directors approved allowing non-employee directors to irrevocably
elect to defer receipt of any part or all of the cash compensation. The
deferred amounts are then adjusted to reflect the performance of the Company's
Common Stock during the deferral period.
The DSOP is intended to further the growth and development of the Company
by encouraging non-employee directors of the Company to expand their ownership
interests in the Company by purchasing its Common Stock. It is intended that
the DSOP will provide such persons with an added incentive to continue to
serve as directors and will stimulate their efforts in promoting the growth,
efficiency and profitability of the Company, thereby more closely aligning
their interests with those of the stockholders generally. There is an
aggregate of 400,000 shares of the Company's Common Stock available for
issuance upon the exercise of options granted under the DSOP, which shares may
be authorized and unissued shares or treasury shares. Options are granted
under the DSOP with an exercise price equal to the fair market value per share
of the Company's Common Stock on the date of the grant. The DSOP is a "formula
plan" which specifies when and in what amounts options are to be granted to
eligible directors. All non-employee directors other than Gary C. Comer, who
has waived participation in the DSOP, participate in the DSOP.
In addition to providing for initial option grants to the non-employee
directors in office at the time the DSOP was approved by the stockholders and
interim grants to new non-employee directors, the DSOP provides for annual
grants of 5,000 shares to each eligible director (other than directors who
received the initial option, who are not eligible for the annual option until
the annual meeting of the stockholders in 2000). In December 1999, the Company
amended the DSOP to provide for the following additional option grants: (i) an
initial option grant of 10,000 shares to each person who becomes a new non-
employee director after December 3, 1999 and (ii) a stock option grant of
5,000 shares effective on December 3, 1999 to each non-employee director who
became a director after the effective date of the DSOP but before December 3,
1999. In fiscal year 1998, Messrs. Anderson, Heller, Krane and Latter each
received an initial grant of 20,000 shares at a price of $28.625. Mr. Okrent
received an interim grant of 2,917 shares at a price of $30.938 upon his
appointment to the Board of Directors in October 1997, an annual grant of
5,000 shares at a price of $34.000 at the 1998 annual meeting of the
stockholders, an
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annual grant of 5,000 shares at a price of $44.8125 at the 1999 annual meeting
of the stockholders and, pursuant to the amendment to the DSOP described
above, an additional grant of 5,000 shares at a price of $57.5625 on December
3, 1999.
In addition to stock options under the DSOP described above, Mr. Anderson
received total compensation of $44,000 from the Company in consideration for
his providing creative and merchandising consulting services to the Company
during fiscal year 2000. The Company contributed premiums of $1,639 each to
the Lands' End, Inc. Health Care Plan on behalf of Messrs. Anderson and Comer
in fiscal year 2000.
COMMITTEES OF THE BOARD
The Board has three standing committees: the Audit Committee, the
Compensation Committee and the Performance Compensation Committee. The Board
does not have a nominating committee. The functions of the standing committees
are described briefly below:
Audit Committee
The members of the Audit Committee are John N. Latter (chairman) and David
B. Heller. The functions of the Audit Committee are to recommend the
appointment of the Company's independent public accountants, to review and
approve the scope of the yearly audit and proposed budget for audit fees, to
review the results of the annual audit, to review the Company's internal
controls and the functions of the Company's internal audit staff, and to
report to the Board of Directors on the activities and findings of the Audit
Committee and make recommendations to the Board of Directors based on such
findings. The Company's internal audit staff and independent public
accountants have direct access to the Audit Committee to discuss auditing and
any other accounting matters. The Audit Committee held three formal meetings
during fiscal year 2000.
Compensation Committee
The members of the Compensation Committee are Howard G. Krane (chairman),
Gary C. Comer, David B. Heller and John N. Latter. The Compensation Committee
monitors the Company's overall compensation policies and specifically reviews
and approves all compensation to be paid to the Company's Chief Executive
Officer, to the four other most highly compensated executive officers (the
"Named Executive Officers") and to any other officer whose annual compensation
is $300,000 or more (except to the extent that such responsibility is
specifically vested in the Performance Compensation Committee). The
Compensation Committee administers the Long-Term Incentive Plan and
establishes the terms of any benefits granted thereunder. The Compensation
Committee held one formal meeting during fiscal year 2000.
Except for the Non-Employee Director Stock Option Plan and the deferred
compensation arrangements described above, none of the members of the
Compensation Committee is or has been, for a period of at least one year prior
to appointment, eligible to receive a benefit under any plans of the Company
entitling participants to acquire Common Stock, stock options or stock
appreciation rights.
Performance Compensation Committee
The members of the Performance Compensation Committee are David B. Heller
(chairman), John N. Latter and Daniel Okrent. The Performance Compensation
Committee administers the Stock Option Plan and establishes the terms of any
benefits granted thereunder. The Performance Compensation Committee also
administers the Company's non-stock based compensation plans which are
intended to provide "performance-based compensation" (as defined in Section
162(m) of the Internal Revenue Code of 1986, as amended) including, but not
limited to, establishing objective performance goals and measures and
certifying that such performance goals and other material terms are satisfied.
The Performance Compensation Committee is comprised solely of directors who
are not (i) current employees of the Company (or any related entity), (ii)
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former employees of the Company (or any related entity) receiving compensation
for prior services (other than certain pension benefits), (iii) former
officers of the Company (or any related entity), or (iv) consultants or
individuals who are otherwise receiving compensation from the Company for
personal services in any capacity other than as a director. The Performance
Compensation Committee held six formal meetings during fiscal year 2000.
Compensation Committee Interlocks and Insider Participation
Gary C. Comer, who currently serves on the Compensation Committee, is the
Company's founder and Chairman of the Board of Directors. Mr. Comer was
President of the Company from 1963 until 1989, and served as Chief Executive
Officer from 1963 until 1990. Mr. Comer is retired from active employment at
the Company.
EXECUTIVE COMPENSATION
Compensation Committee Report on Executive Compensation
Overview
Our goal as a Compensation Committee is to provide a compensation framework
for recruiting, motivating, rewarding and retaining the Company's employees,
including its executive officers. We regularly engage a nationally recognized
compensation consulting firm to assist our Committee in developing an overall
perspective on base and incentive compensation and benefit practices and to
advise on specific issues relating to the Company's compensation practices.
Representatives of the consulting firm meet with us (sometimes with other
Board members in attendance) on a regular basis and have other informal
discussions with members of our Committee.
Components of Fiscal Year 2000 Compensation
The principal elements of compensation for the Company's executive officers
currently consist of base salary, bonuses under the Annual Incentive Plan and
awards under the Stock Option Plan. In addition, executives may receive future
payments under the Long-Term Incentive Plan with respect to three-year
performance periods that commenced prior to fiscal 2000.
Base Salary. In determining and reviewing base salary levels, the
Compensation Committee considers the size and responsibility of the
individual's position, the individual's overall performance, the base salaries
paid by competitors for comparable positions and, in the case of new hires,
the amount of the individual's prior compensation and the need to induce the
individual to enter the employ of the Company. In making salary decisions with
respect to senior executives and overseeing other salary decisions made by
management, the Committee exercises its discretion and judgment based on the
foregoing factors, without applying a specific formula to determine the weight
of each factor considered.
Annual Incentive Plan. The Annual Incentive Plan (bonus) provides for
participation by most of the Company's salaried employees (currently
approximately 795 individuals). Pursuant to this plan, each participant is
granted an annual incentive award at or about the beginning of each fiscal
year. Each annual incentive award consists of the right to be eligible to
receive a cash bonus, part of which is paid in December of the fiscal year to
which the grant relates and the balance of which is paid in the month of March
following such fiscal year, provided that the participant remains employed by
the Company at the end of such fiscal year.
Other than participants employed by international subsidiaries of the
Company, each participant's bonus eligibility amount is 10% of base salary,
provided that the Compensation Committee has the right to approve higher
levels for certain participants on an individual basis. For fiscal 2000 and
prior years, participants earned bonuses equal to their bonus eligibility
amount multiplied by a factor of 0% to 200%, depending on financial results
based on the Company's annual pre-tax margin. For fiscal 2000, the bonus
eligibility amounts for most of the Company's salaried employees were 10% of
base salary. The bonus eligibility amounts for fiscal 2000 were
5
60% for the Named Executive Officers. Mr. Dyer was not a participant in the
Annual Incentive Plan during fiscal 2000. However, in January 2000, our
Committee recommended, and the Board approved, (i) that Mr. Dyer be awarded a
bonus for fiscal 2000 in the amount to which he would have been entitled if he
had been a participant in the Annual Incentive Plan at the 100% bonus level
and (ii) that Mr. Dyer become a participant in the Annual Incentive Plan at
the 100% bonus level with respect to fiscal 2001 and thereafter.
Long-Term Incentive Plan. The Long-Term Incentive Plan provides for
participation by certain of the Company's managers (currently approximately 45
individuals). Pursuant to this Plan, each participant was granted a long-term
incentive award at or about the beginning of each fiscal year prior to fiscal
2000, commencing with fiscal 1997. Each long-term incentive award consisted of
the right to be eligible to receive a cash bonus after the completion of a
three-year performance period, provided that the participant remained employed
by the Company at the end of such period (except in cases where employment
terminates due to retirement, disability or death).
The Company's most senior executives, including the Named Executive
Officers, have not participated in the Long-Term Incentive Plan. For those who
do participate, the cash bonus eligibility amounts range from 10% to 30% of
base salary, with most participants being eligible for 10% of base salary.
Participants earn a bonus equal to their bonus eligibility amount, multiplied
by a factor of 0% to 200%, depending on overall corporate results measured by
a matrix of (i) the Company's three year average pre-tax margin and (ii) the
Company's three year average return on invested capital. The matrix is subject
to adjustment from time to time at the discretion of the Compensation
Committee.
We concluded in January 1999 that it would be desirable to broaden the
number of employees who receive grants of stock options beyond the very
limited group who had received stock options in the previous few years and, in
light of this revised approach to stock options, that it would also be
desirable to discontinue the making of awards under the Long-Term Incentive
Plan. Accordingly, we recommended to the Board that no new performance period
commence under the Plan in fiscal 2000. Participants would, however, remain
eligible to receive bonuses under the Plan with respect to the three-year
performance periods that commenced at the beginning of fiscal 1998 and fiscal
1999. The Board agreed with and approved our recommendations.
Stock Option Plan. The Performance Compensation Committee awarded a total
of 581,000 stock options to a total of 21 recipients under the Company's Stock
Option Plan in fiscal year 2000. Mr. Eisenberg received a total of 200,000
options as an inducement to join the Company as executive vice president in
February 1999. The other 381,000 stock option awards were granted to 20 other
employees, none of whom is a Named Executive Officer. These grants are
consistent with our goal of broadening somewhat the participation in the Stock
Option Plan and providing significant stock-based incentive compensation for
senior executives so as to incent management to increase shareholder value
over time.
Chief Executive Officer Compensation
David F. Dyer rejoined the Company as chief executive officer in October
1998. Mr. Dyer's annual base salary is $450,000, which is the level
established when Mr. Dyer rejoined the Company as chief executive officer in
1998. As noted above, we recommended and the board approved a bonus for Mr.
Dyer for fiscal year 2000 at the level he would have received for that year if
he had been a participant in the Annual Incentive Plan, which amounts to
$202,500.
Tax Matters
The Compensation Committee and the Board have considered the provisions of
Section 162(m) of the Internal Revenue Code, which impose an annual limit of
$1 million on the deductibility of compensation payments to a company's chief
executive officer and the four other most highly compensated executive
officers for whom proxy statement disclosure is required and who are employed
at the end of such company's taxable year. "Performance-based compensation"
(as defined in the Code) is excluded from this limit. It is the
6
Company's intention to preserve the deductibility of compensation paid to its
employees, including gains realized upon the exercise of non-qualified stock
options, to the extent feasible and consistent with the Company's overall
compensation philosophy. Accordingly, the Performance Compensation Committee
administers the Company's Stock Option Plan and all other plans which are
intended to provide "performance-based compensation" as defined in Section
162(m) of the Internal Revenue Code. This Committee currently consists of Mr.
Heller, as chairman, and Messrs. Latter and Okrent, each of whom is believed
to meet certain director eligibility requirements specified in Section 162(m).
Notwithstanding the foregoing, the Compensation Committee believes that the
Company's compensation philosophy is appropriate and consistent with the long-
term interests of the Company, without regard to tax considerations. In the
event of changes in the tax law or other circumstances that might affect tax
treatment, we would not currently anticipate that fundamental changes would be
made in the Company's overall compensation policies and practices.
Submitted by the Compensation
Committee
of the Board of Directors
Howard G. Krane, Chairman
Gary C. Comer
David B. Heller
John N. Latter
7
Summary Compensation Table
Set forth below is certain information concerning the compensation for each
of the Named Executive Officers for the fiscal year ended January 28, 2000:
Long-Term
Annual Compensation Compensation Awards
----------------------------------- --------------------
Restricted
Other Annual Stock Stock All Other
Name and Principal Fiscal Salary Bonus Compensation Awards Options Compensation
Position Year ($) ($) ($) ($)(1) (#) ($)(2)
- ------------------ ------ ------- ------- ------------ ---------- --------- ------------
David F. Dyer........... 2000 450,000 202,500 -0- -0- -0- 117,469(4)
President and Chief 1999 115,962 -0- 300,000(3) -0- 1,000,000 15,406
Executive Officer
Mindy C. Meads.......... 2000 350,000 94,500 -0- -0- -0- 142,417(6)
Executive Vice
President, 1999 49,808 -0- 100,000(5) -0- 200,000 201
Merchandising and Design
Lee Eisenberg(7)........ 2000 329,808 89,048 200,000(8) -0- 200,000 74,266(9)
Executive Vice
President,
Creative Director
Stephen A. Orum......... 2000 280,000 75,600 -0- -0- -0- 19,155
Executive Vice
President, 1999 277,500 -0- -0- -0- 60,000 21,656
Chief Financial Officer 1998 265,000 162,975 -0- -0- -0- 32,767
Francis P. Schaecher.... 2000 235,000 63,450 -0- -0- -0- 16,304
Senior Vice President, 1999 232,500 -0- -0- -0- 35,000 18,060
Operations 1998 217,500 133,762 -0- -0- 15,000 25,527
- --------
(1) Dividends, if any, on shares of restricted stock are paid at the same time
and at the same rate as dividends on the Company's unrestricted Common
Stock. The aggregate number and value (based on the closing price of the
Company's Common Stock ($33.625) on the New York Stock Exchange on January
28, 2000) of each Named Executive Officer's restricted stock holdings as
of such date are as follows: Mr. Dyer, 0 shares, $0; Ms. Meads, 0 shares,
$0; Mr. Eisenberg, 0 shares, $0; Mr. Orum, 1,200 shares, $40,350; and Mr.
Schaecher, 0 shares, $0.
(2) For fiscal year 2000, these amounts represent the taxable portion of
premiums on Company-provided life insurance, the Company's contributions
to the Retirement Plan and the Company's contributions to the Deferred
Compensation and Excess Benefit Plan, in the following amounts: Mr. Dyer
$1,786, $9,498, $14,040, respectively; Ms. Meads, $1,487, $9,210, $11,755,
respectively; Mr. Eisenberg, $2,184, $0, $0, respectively; Mr. Orum,
$2,383, $8,200, $8,572, respectively; and Mr. Schaecher, $2,228, $8,200,
$5,876, respectively.
(3) In fiscal year 1999, Mr. Dyer received a signing bonus of $300,000 from
the Company pursuant to the terms of his appointment as President and
Chief Executive Officer effective October 27, 1998.
(4) Of the $117,469 in fiscal year 2000, $83,535 is for personal use of
Company planes, $4,479 is for relocation expenses, $4,131 is for
reimbursement for his income tax liability on the relocation expenses paid
on his behalf and the remainder is described in footnote (2) above.
(5) In fiscal year 1999, Ms. Meads received a signing bonus of $100,000 from
the Company pursuant to the terms of her appointment as Executive Vice
President, Merchandising and Design effective December 10, 1998.
(6) Of the $142,417 in fiscal year 2000, $62,406 is for relocation expenses,
$57,559 is for reimbursement for her income tax liability on the
relocation expenses paid on her behalf and the remainder is described in
footnote (2) above.
(7) Mr. Eisenberg was appointed Executive Vice President, Creative Director of
the Company on February 1, 1999.
8
(8) In fiscal year 2000, Mr. Eisenberg received a signing bonus of $200,000
from the Company pursuant to the terms of his appointment as Executive
Vice President, Creative Director effective February 1, 1999.
(9) Of the $74,266 in fiscal year 2000, $23,691 is for personal use of Company
planes, $13,806 is for relocation expenses, $34,585 is for reimbursement
for his income tax liability on the personal use of Company planes and the
relocation expenses paid on his behalf and the remainder is described in
footnote (2) above.
Stock Option Grants in Fiscal Year 2000
Set forth below is certain information relating to options to acquire
Common Stock granted to each Named Executive Officer during the fiscal year
ended January 28, 2000, and the grant-date present value of each option grant.
Percent of Potential Realizable Value
Total Stock at Assumed Annual Rates of
Options Stock Price Appreciation for
Granted to Exercise Option Term
Stock Options Employees in Price Expiration ----------------------------
Name Granted(#) Fiscal Year ($/Sh) Date 5%(2) 10%(2)
- ---- ------------- ------------ -------- ---------- ------------- --------------
Lee Eisenberg(1)........ 200,000 34.42% $30.375 2/01/09 $ 4,229,000 $ 10,717,000
- --------
(1) Options are exercisable starting on August 1, 1999, with 30% of the shares
covered thereby becoming exercisable at that time, and an additional 30%
and 40% of the option shares becoming exercisable on the second and third
anniversaries of the grant date (February 1, 1999), respectively.
(2) The actual value, if any, an executive may realize will depend upon the
excess of the stock price over the exercise price on the date the option
is exercised, so there is no assurance that the value realized by the
executive will be at or near the amount shown. In order to realize the
potential value set forth in the 5% and 10% columns, the per share price
of the Common Stock would be approximately $54.77 and $87.21.
Stock Option Exercises and Fiscal Year-End Value Table
Set forth below is certain information relating to options to acquire
Common Stock exercised by each Named Executive Officer during the fiscal year
ended January 28, 2000, and options to acquire Common Stock held by each Named
Executive Officer as of such date.
Number of Securities
Underlying Unexercised Value of Unexercised In-the-
Shares Value Stock Options at Money Stock Options at
Acquired on Realized FY-End(#) FY-End($)
Name Exercise(#) ($)(1) Exercisable/Unexercisable Exercisable/Unexercisable(2)
- ---- ----------- --------- ------------------------- ----------------------------
David F. Dyer........... 50,000 1,612,500 950,000/ 0 14,368,750/ 0
Mindy C. Meads.......... -0- -0- 60,000/ 140,000 776,250/ 1,811,250
Lee Eisenberg........... -0- -0- 60,000/ 140,000 195,000/ 455,000
Stephen A. Orum......... 50,000 1,485,010 61,850/ 91,750 1,014,194/ 608,406
Francis P. Schaecher.... -0- -0- 38,750/ 61,850 556,075/ 258,900
- --------
(1) Upon exercise of an option, an individual does not receive cash equal to
the amount contained in the Value Realized column of this table. Instead,
the amounts contained in the Value Realized column reflect the increase in
the price of the Company's Common Stock from the option award date to the
option exercise date. No cash is realized until the shares received upon
exercise of an option are sold.
(2) Calculated based upon the closing price of the Company's Common Stock
($33.625) on the New York Stock Exchange on January 28, 2000.
9
Performance Graph
The following graph presents the cumulative total shareholder return of the
Company, the Value Line Retail Index and the Standard & Poor's MidCap 400
Index for a five year period. Cumulative total shareholder return is defined
as share price appreciation assuming reinvestment of dividends. The Company's
Common Stock is included in both the Value Line Retail Index and the Standard
& Poor's MidCap 400 Index. In addition to the Company, 65 retailers (including
catalog companies) comprise the Value Line Retail Index. The dollar amounts
shown on the following graph assume that $100 was invested on February 1, 1995
in Company Common Stock, stocks constituting the Value Line Retail Index and
stocks constituting the Standard and Poor's MidCap 400 Index with all
dividends being reinvested. The January 31st dates shown on the following
graph do not correspond exactly with the last day of the Company's fiscal year
in calendar years 1996, 1998, 1999 and 2000.
Comparison of Five-Year Total Return
Among Lands' End, Inc., Value Line Retail Index and S&P MidCap 400 Index
[Performance Graph]
Value of $100 invested on February 1,
1995 at
-----------------------------------------
1/31/96 1/31/97 1/31/98 1/31/99 1/31/2000
------- ------- ------- ------- ---------
Lands' End, Inc....................... $ 91 $176 $244 $201 $214
Value Line Retail Index............... 99 127 177 254 244
S&P MidCap 400 Index.................. 131 160 200 234 271
10
PRINCIPAL SHAREHOLDERS
The following table shows certain information concerning the number of
shares of the Company's Common Stock beneficially owned, directly or
indirectly, by each director and nominee for director of the Company, the
chief executive officer and each of the other most highly compensated
executive officers of the Company, and the directors and executive officers as
a group. The following table also sets forth information concerning each
person known to the Company as of March 31, 2000 to be the "beneficial owner"
(as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended)
of more than 5% of the Company's Common Stock. Unless otherwise indicated, the
persons named in the table have sole voting and investment power with respect
to all shares shown as beneficially owned by them. Except as described in the
notes below, all information in the table and the accompanying footnotes is
given as of March 31, 2000 and has been supplied by each of the persons
included in the table.
Percent
Beneficial Owners Amount of Class
----------------- ---------- --------
Gary C. Comer(1).................................... 16,749,392 55.44%
Address: 20875 Crossroads Circle, Suite 100;
Waukesha, WI 53186
Richard C. Anderson(2).............................. 1,184,010 3.92%
David B. Heller(3).................................. 38,000 *
Howard G. Krane(4).................................. 40,000 *
John N. Latter(5)................................... 135,000 *
Daniel Okrent(6).................................... 18,917 *
David F. Dyer(7).................................... 963,431 3.09%
Lee Eisenberg(8).................................... 33,500 *
Mindy C. Meads(9)................................... 60,000 *
Stephen A. Orum(10)................................. 107,100 *
Francis P. Schaecher(11)............................ 114,250 *
All directors and executive officers as a group (11
persons)(12)....................................... 19,443,600 61.73%
- --------
*Less than 1%.
(1) Share amount shown includes (i) 567,642 shares of the Company's Common
Stock held by a trust for the benefit of Mr. Comer and his family as to
which he disclaims beneficial ownership except to the extent of his
pecuniary interest therein and (ii) 2,142,934 shares of the Company's
Common Stock held by trusts for the benefit of Mr. Comer's family as to
which he disclaims beneficial ownership.
(2) Share amount shown includes (i) exercisable options for 20,000 shares of
Company Common Stock granted to Mr. Anderson on May 14, 1997 under the
Non-Employee Director Stock Option Plan, (ii) 38,141 shares of the
Company's Common Stock held by a trust for the benefit of Mr. Anderson
and his family as to which he disclaims beneficial ownership except to
the extent of his pecuniary interest therein, (iii) 69,859 shares of the
Company's Common Stock held by a trust for the benefit of Mr. Anderson's
family as to which he disclaims beneficial ownership and (iv) 215,105
shares of the Company's Common Stock held by a trust for the benefit of
Mr. Anderson's family as to which he disclaims beneficial ownership.
(3) Share amount shown includes exercisable options for 20,000 shares of
Company Common Stock granted to Mr. Heller on May 14, 1997 under the Non-
Employee Director Stock Option Plan.
(4) Share amount shown includes (i) exercisable options for 20,000 shares of
Company Common Stock granted to Mr. Krane on May 14, 1997 under the Non-
Employee Director Stock Option Plan and transferred to Krane Investment
Partners, L.P. and (ii) 2,000 shares of the Company's Common Stock owned
by Mr. Krane's wife as to which he disclaims beneficial ownership.
11
(5) Share amount shown includes (i) exercisable options for 20,000 shares of
Company Common Stock granted to Mr. Latter on May 14, 1997 under the Non-
Employee Director Stock Option Plan and (ii) 50,000 shares of the
Company's Common Stock held by a trust for the benefit of Mr. Latter's
wife as to which he disclaims beneficial ownership.
(6) Share amount shown includes exercisable options for 17,917 shares of
Company Common Stock granted to Mr. Okrent on October 7, 1997, May 13,
1998, May 19, 1999 and December 3, 1999 under the Non-Employee Director
Stock Option Plan.
(7) Share amount shown includes options for 950,000 shares of Company Common
Stock granted to Mr. Dyer on October 27, 1998 under the Stock Option
Plan.
(8) Share amount shown includes options for 32,000 shares of Company Common
Stock granted to Mr. Eisenberg on February 1, 1999 under the Stock Option
Plan.
(9) Share amount shown includes options for 60,000 shares of Company Common
Stock granted to Ms. Meads on December 4, 1998 under the Stock Option
Plan.
(10) Share amount shown includes exercisable options for 92,100 shares of
Company Common Stock granted to Mr. Orum on December 10, 1993, February
13, 1995, March 15, 1996 and January 29, 1999 under the Stock Option
Plan.
(11) Share amount shown includes exercisable options for 54,250 shares of
Company Common Stock granted to Mr. Schaecher on December 10, 1993,
February 13, 1995, March 15, 1996, November 24, 1997 and January 29, 1999
under the Stock Option Plan.
(12) Share amount shown includes exercisable options for 1,286,267 shares of
Company Common Stock granted to certain executive officers under the
Stock Option Plan and certain directors under the DSOP.
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors recommends that shareholders ratify the appointment
of Arthur Andersen LLP as independent public accountants to audit the
Company's consolidated financial statements for the fiscal year ending January
26, 2001. A representative of Arthur Andersen LLP will be present at the
meeting with the opportunity to make a statement if such representative so
desires, and will be available to respond to appropriate questions raised
orally at the meeting or submitted in writing to the Company's Secretary
before the meeting.
OTHER INFORMATION
Compliance With Section 16(a) of The Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of the
Company's Common Stock, to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission and the New
York Stock Exchange. Officers, directors and greater than ten-percent
beneficial owners are required by Securities and Exchange Commission
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
To the best of the Company's knowledge, based solely on its review of the
copies of such forms received by it, or written representations from certain
reporting persons that no Section 16(a) forms were required for those persons,
all Section 16(a) filing requirements applicable to its officers, directors
and greater than ten-percent beneficial owners were complied with during the
fiscal year ended January 28, 2000.
Additional Matters
The Board of Directors is not aware of any other matters that will be
presented for action at the 2000 Annual Meeting. Should any additional matters
properly come before the meeting, properly signed and dated proxies will be
voted on those matters by the persons named therein in accordance with the
best judgment of such persons.
12
Submission of Shareholder Proposals
The Company's By-Laws require that the Company be provided with written
notice with respect to the nomination of a person for election as a director
or the submission of any proposal at an annual meeting of shareholders. Any
such notice must include certain information concerning the nominating or
proposing shareholder, and the nominee or the proposal, and must be furnished
to the Company not less than 10 business days prior to such meeting. A copy of
the applicable By-Law provision may be obtained, without charge, upon written
request to the Secretary of the Company at the address set forth below.
In addition, all shareholder proposals to be included in the Board of
Directors' Proxy Statement and proxy for the 2001 Annual Meeting of
shareholders must (i) be received by the Secretary of the Company not later
than December 26, 2000, and (ii) satisfy the conditions established by the
Securities and Exchange Commission as necessary to entitle such proposal to be
included in the Proxy Statement and form of proxy.
Cost of Proxy Solicitation
The Company will pay the cost of preparing, printing and mailing proxy
materials as well as the cost of soliciting proxies on behalf of the Board of
Directors. In addition to using the mails, officers and other employees of the
Company may solicit proxies in person and by telephone and telegraph.
Report to Shareholders
The Company has mailed this Proxy Statement along with a copy of the
Company's 2000 Annual Report to each shareholder entitled to vote at the
Annual Meeting. Included in the 2000 Annual Report are the Company's
consolidated financial statements for the fiscal year ended January 28, 2000.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED JANUARY 28, 2000, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
MAY BE OBTAINED WITHOUT CHARGE BY SENDING A WRITTEN REQUEST TO THE SECRETARY,
LANDS' END, INC., ONE LANDS' END LANE, DODGEVILLE, WISCONSIN 53595.
By order of the Board of Directors,
/s/ Robert S. Osborne
Robert S. Osborne
Secretary
April 24, 2000
13
[LANDS' END SITE MAP]
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
- --------------------------------------------------------------------------------
LANDS' END, INC.
Vote On Directors
1. The nominees for Directors are:
01) Richard C. Anderson
02) Howard G. Krane
For Withhold For All
All All Except
[_] [_] [_]
To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below.
----------------------------------------------------------------------------
Vote On Proposals
2. PROPOSAL TO APPROVE THE APPOINTMENT OF ARTHUR ANDERSEN LLP as the
independent public accountants of the Company.
For Against Abstain
[_] [_] [_]
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Please mark, sign, date and return this proxy card promptly using the enclosed
envelope.
- ------------------------------------------
|
- ------------------------------------------
Signature [PLEASE SIGN WITHIN BOX] Date
- ------------------------------------------
|
- ------------------------------------------
Signature (Joint Owners) Date
- --------------------------------------------------------------------------------
LANDS' END, INC.
ANNUAL MEETING OF SHAREHOLDERS - MAY 24, 2000
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Gary C. Comer, David F. Dyer and Robert S.
Osborne as Proxies, each with the power to appoint his substitute and hereby
authorizes each of them to represent and to vote, as designated below, all of
the shares of common stock of Lands' End, Inc. held of record by the undersigned
on March 31, 2000, at the annual meeting of shareholders to be held on May 24,
2000, or any adjournment thereof.
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 the election of the nominees listed in Item 1 and FOR Proposal 2.