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SCHEDULE 14A
(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:
[ ] 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
CHICO'S FAS, 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)(1) 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:
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(CHICO'S LOGO)
CHICO'S FAS, INC.
11215 METRO PARKWAY
FT. MYERS, FLORIDA 33912
April 20, 1999
TO OUR STOCKHOLDERS:
You are cordially invited to attend our 1999 Annual Meeting of Stockholders
which will be held on June 8, 1999 at 2:00 p.m., local time, in the Conference
Center at the South Seas Resort, Captiva, Florida.
We're holding this year's Annual Meeting away from our corporate office
because, frankly, as we have grown, we have found it necessary to occupy the
space at our headquarters facility that we have used in the past for our annual
meeting. We think that the South Seas Resort venue is a perfect one for Chico's.
Please read these materials so that you'll know what we plan to do at the
meeting. Also, please sign and return the accompanying proxy card. This way,
your shares will be voted as you direct even if you can't attend the meeting.
/s/ Marvin Gralnick
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MARVIN J. GRALNICK
Chief Executive Officer, President
and Chairman of the Board
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(CHICO'S LOGO)
CHICO'S FAS, INC.
11215 METRO PARKWAY
FT. MYERS, FLORIDA 33912
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 8, 1999
To the Stockholders of
Chico's FAS, Inc.:
TIME 2:00 p.m., Local Time, on Tuesday, June 8, 1999
PLACE The Meyer Room in Lindbergh Hall, Conference Center
South Seas Resort
Captiva, Florida
ITEMS OF BUSINESS 1. To elect two Class III directors to each serve
for a three-year term;
2. To ratify the appointment of Arthur Andersen LLP
as the Company's independent certified public
accountants for fiscal year 2000;
3. To approve the Non-Employee Directors' Stock
Option Plan;
4. To ratify the amendment of the 1993 Employee
Stock Purchase Plan;
5. To ratify the amendment of the 1993 Stock Option
Plan; and
6. To transact such other business as may properly
come before the meeting or any adjournments or
postponements thereof.
RECORD DATE You can vote if you are a shareholder of record on
April 19, 1999.
ANNUAL REPORT Our 1999 Annual Report, which is not a part of the
proxy soliciting material, is enclosed.
PROXY VOTING It is important that your shares be represented and
voted at the Annual Meeting. Please vote by dating,
signing and mailing the enclosed proxy promptly in
the enclosed postage paid pre-addressed envelope.
If you should be present at the meeting and desire
to vote in person, you may withdraw your proxy.
By Order of the Board of Directors,
CHARLES J. KLEMAN, Secretary
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(CHICO'S LOGO)
CHICO'S FAS, INC.
11215 METRO PARKWAY
FT. MYERS, FLORIDA 33912
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 8, 1999
To the Stockholders of April 20, 1999
Chico's FAS, Inc.:
These proxy materials are delivered in connection with the solicitation by
the Board of Directors of Chico's FAS, Inc. ("Chico's," the "Company," "we," or
"us"), a Florida corporation, of proxies to be voted at our 1999 Annual Meeting
of Stockholders and at any adjournments or postponements thereof.
You are invited to attend our Annual Meeting of Stockholders on June 8,
1999, beginning at 2:00 p.m., Local Time. The Annual Meeting will be held in the
Conference Center at the South Seas Resort, Captiva, Florida. Stockholders will
be admitted beginning at 1:30 p.m.
It is important that proxies be returned promptly to avoid unnecessary
expense to the Company. Therefore, whether you plan to attend the Annual Meeting
or not and regardless of the number of shares of stock you own, please date,
sign and return the enclosed proxy promptly.
ABOUT THE ANNUAL MEETING
WHAT IS THE PURPOSE OF THE MEETING?
At the Annual Meeting, stockholders will act upon the matters outlined in
the accompanying notice of meeting, including the election of directors,
ratification of the Company's independent auditors, approval of the Non-Employee
Directors' Stock Option Plan and approval of an amendment to the 1993 Employee
Stock Purchase Plan. In addition, the Company's management will report on the
performance of the Company during fiscal 1999 and respond to questions from
stockholders.
WHEN ARE THESE MATERIALS BEING MAILED?
This Proxy Statement, form of proxy and voting instructions are being
mailed starting on approximately April 29, 1999.
WHO IS ENTITLED TO VOTE?
Only stockholders of record at the close of business on the record date,
April 19, 1999, are entitled to receive notice of the Annual Meeting and to vote
at the Annual Meeting (or any adjournment or postponement thereof) the shares of
common stock that they held on that date. As of that date, there were 8,415,431
common shares outstanding. Each common share is entitled to one vote on each
matter properly brought before the Annual Meeting. Shares of common stock, par
value $.01 per share (the "Common Stock") are the only outstanding voting
securities of the Company.
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WHAT CONSTITUTES A QUORUM?
The presence at the Annual Meeting, in person or by proxy, of the holders
of a majority of the shares of common stock outstanding on the record date will
constitute a quorum, permitting the meeting to conduct its business. Proxies
received but marked as abstentions and broker non-votes will be included in the
calculation of the number of shares considered to be present at the Annual
Meeting. A broker non-vote occurs when a nominee holding shares for a beneficial
owner does not vote on a particular proposal because the nominee does not have
discretionary voting power for that particular item and has not received
instructions as to that item from the beneficial owner.
HOW DO I VOTE?
If you complete and properly sign the accompanying proxy card and return it
to the Company's transfer agent, it will be voted as you direct. If you are a
registered stockholder and attend the Annual Meeting, you may vote at the Annual
Meeting either by delivering your completed proxy card in person or by voting
instead by ballot. If your shares are held in the name of a bank, broker or
other holder of record, you must obtain a proxy, executed in your favor, from
the holder of record to be able to vote at the Annual Meeting.
CAN I VOTE BY TELEPHONE OR ELECTRONICALLY?
Unfortunately, no. We know that many companies have permitted their
stockholders to vote by telephone, over the Internet or through other electronic
means. However, Chico's is a Florida corporation and such form of proxy voting
is not yet authorized by applicable Florida law.
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Yes. Even after you have submitted your proxy, you may revoke the proxy and
you may change your vote at any time before the proxy is exercised by filing
with the Secretary of the Company either a written notice of revocation or a
duly executed proxy bearing a later date or by attending the Annual Meeting and
voting the shares in person. No such notice of revocation or later-dated proxy,
however, will be effective until received by the Company at or prior to the
Annual Meeting. Unless the proxy is revoked, the shares represented thereby will
be voted at the Annual Meeting or any adjournment thereof. The giving of the
proxy does not affect the right to vote in person should the stockholder attend
the meeting, although attendance at the meeting will not by itself revoke a
previously granted proxy.
IF I SUBMIT A PROXY, HOW WILL MY SHARES BE VOTED?
Unless you give other instructions on your proxy card, the persons named as
proxy holders on the proxy card will vote in accordance with the recommendations
of the Board of Directors.
WHAT ARE THE BOARD'S RECOMMENDATIONS?
The Board's recommendations are set forth together with the description of
each item in this proxy statement. In summary, The Board recommends a vote:
- for election of the nominees for the Class III Director positions (see
page 3);
- for ratification of the appointment of Arthur Andersen LLP as the
Company's independent auditors (see page 6);
- for approval of the Non-Employee Directors' Stock Option Plan (see page
6);
- for ratification of an amendment to the 1993 Employee Stock Purchase Plan
(see page 8); and
- for ratification of an amendment to the 1993 Stock Option Plan (see page
9).
With respect to any other matter that properly comes before the meeting,
the proxy holders will vote as recommended by the Board of Directors or, if no
recommendation is given, in their own discretion. At the date this proxy
statement went to press, we did not know of any other matter to be raised at the
Annual Meeting.
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WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
Election of Directors. The affirmative vote of a plurality of the votes
cast at the Annual Meeting is required for the election of directors. A properly
executed proxy marked "WITHHOLD AUTHORITY" with respect to the election of one
or more directors will not be voted with respect to the director or directors
indicated, even though it will be counted for purposes of determining whether
there is a quorum present at the Annual Meeting.
Other Items. For each other item, the item will be approved if the
affirmative votes in favor of the item are greater than the votes cast opposing
the item. A properly executed proxy marked "ABSTAIN" with respect to any such
matter will not be voted, even though it will be counted for purposes of
determining whether there is a quorum present at the Annual Meeting.
Accordingly, for purposes of the vote, an abstention will have the same effect
as does a share that is not present.
HOW WILL VOTES BE COUNTED?
All votes will be tabulated by employees of the Registrar and Transfer
Company, the Company's transfer agent for the Common Stock, whose
representatives will serve as one or more of the inspectors of election.
Although abstentions and broker non-votes are each included in the determination
of the number of shares present, they are not counted on any matters brought
before the meeting.
WHO IS PAYING FOR THE PREPARATION AND MAILING OF THE PROXY MATERIALS AND HOW
WILL SOLICITATIONS BE MADE?
We will pay the expenses of soliciting proxies. Proxies may be solicited on
our behalf by directors, officers or employees in person or by telephone, mail,
electronic transmission, facsimile transmission or telegram. The Company will
request brokerage houses and other custodians, nominees and fiduciaries to
forward soliciting material to the stockholders and the Company will reimburse
such institutions for their out-of-pocket expenses incurred thereby.
1. ELECTION OF DIRECTORS -- ITEM ONE ON YOUR PROXY CARD
DIRECTORS STANDING FOR ELECTION
The Board of Directors is divided into three classes, currently consisting
of two directors in each class, whose terms expire at successive annual
meetings. The current terms of the three classes of directors expire in 1999
(Class III directors), 2000 (Class I directors) and 2001 (Class II directors).
Directors are generally elected for three-year terms.
Two Class III directors are to be elected at the 1999 Annual Meeting. The
Board of Directors has nominated the following persons to stand for election at
the 1999 Annual Meeting for the two director seats (terms expiring in 2002):
Marvin J. Gralnick
John W. Burden
The persons named in the enclosed form of proxy intend, unless otherwise
directed, to vote such proxy "FOR" the election of Marvin J. Gralnick and John
W. Burden as Class III directors of the Company, each to serve for the term
described above. The nominees that receive a plurality of the votes cast by the
shares entitled to vote at the Annual Meeting shall be elected as the directors.
Each of the proposed nominees for election as directors has consented to
serve if elected. If, as a result of circumstances not now known or foreseen,
the nominees shall be unavailable or unwilling to serve as a director, proxies
may be voted for the election of such other persons as the Board of Directors
may select. The Board of Directors has no reason to believe that the nominees
will be unable or unwilling to serve.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THESE NOMINEES FOR
ELECTION AS DIRECTORS.
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NOMINEES FOR ELECTION AT THIS MEETING TO TERMS EXPIRING IN 2002:
MARVIN J. GRALNICK, 64, is Chief Executive Officer, President and Chairman
of the Board of the Company. Marvin J. Gralnick, together with his wife, Helene
B. Gralnick, founded Chico's in December 1983. He served the Company as its
Chief Executive Officer until September 1993, at which time Jeffrey J. Zwick
succeeded Mr. Gralnick in this position. In connection with the resignation of
Jeffrey J. Zwick as Chief Executive Officer, President and a director of the
Company in November 1994, Mr. Gralnick returned to the Company on a full time
basis to head up merchandise design, marketing and image for the Company. In
February 1995, Mr. Gralnick reassumed the role of Chief Executive Officer and in
March 1997 reassumed the position of President following the departure of
Melissa Payner. Mr. Gralnick served as President from the Company's founding
until 1990 when he became Chairman of the Board and was given the official title
of Chief Executive Officer. Mr. and Ms. Gralnick's vision and creative talents
led the development and evolution of the Company's philosophy and the design and
feel of Chico's merchandise and Chico's stores through September 1, 1993 and
since November 1994 again are leading the Company in this regard.
Director since 1983.
JOHN W. BURDEN, 62, is currently an independent retailing consultant,
having served as a consultant and partner in Retail Options, Inc. from November
1993 to December 1997. From December, 1990 to March 1993, Mr. Burden's principal
occupation was as an officer in Pelican Palms Realty Company, a real estate
sales company he owned. In 1990, he retired as the Chairman of both Federated
Department Stores, Inc., and Allied Department Stores, Inc., following a 19 year
career in various merchandising positions in the Federated organization,
including President of Burdines and Chairman of the Abraham and Strauss
Division. Prior to that time, he spent 12 years with Macy's. Mr. Burden is also
a director of J. Crew and Saks Incorporated.
Director since 1997.
DIRECTORS CONTINUING IN OFFICE
DIRECTORS WHOSE PRESENT TERMS CONTINUE UNTIL 2000:
CHARLES J. KLEMAN, 48, is Executive Vice President -- Finance, Chief
Financial Officer and Secretary/Treasurer of the Company. Charles J. Kleman has
been employed by Chico's since January 1989, when he was hired as the Company's
Controller. In 1991, he was elected as Vice President/Assistant Secretary. In
1992, Mr. Kleman was designated as the Company's Chief Financial Officer. In
September 1993, he was elected to the additional position of
Secretary/Treasurer, served as Senior Vice President -- Finance from January
1996 through November 1996 and effective December 1996, was promoted to the
position of Executive Vice President -- Finance. Prior to joining Chico's, Mr.
Kleman was an independent accounting consultant in 1988, and from 1986 to 1988
Mr. Kleman was employed by Electronic Monitoring & Controls, Inc., a
manufacturer and distributor of energy management systems, as its Vice
President/Controller. Prior to 1986, Mr. Kleman was employed by various
independent certified public accounting firms, spending over four years of that
time with Arthur Andersen & Co. Mr. Kleman is responsible for accounting,
financial reporting, management information systems, investor relations and
overall management of the distribution center.
Director since 1993.
ROSS E. ROEDER, 61, recently assumed the positions of Chairman and Chief
Executive Officer of Smart & Final, Inc., having served as a director of SFI
Corporation, the parent corporation of Smart & Final, since 1984. From 1986 to
1998, Mr. Roeder served as a director of Morgan-Kaufman Publishers, Inc., a
publisher of computer science text and reference books, and from 1993 to 1998
served as its chairman of the board. Since the late 1970s, he also served and
continues to serve as Chairman of the Board and Chief Executive Officer of MDR,
Inc., International Consulting Group. Mr. Roeder is also a director of Gulf West
Banks, Inc. From 1986 until February 1993, Mr. Roeder was President and Chief
Executive Officer of Federal Construction
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Company. Prior to 1986, he was President, Chief Executive Officer and Chief
Operating Officer of Fotomat Corp.
Director since 1997.
DIRECTORS WHOSE PRESENT TERMS CONTINUE UNTIL 2001:
HELENE B. GRALNICK, 51, is Senior Vice President -- Design and Concept for
the Company. Helene B. Gralnick was a co-founder of Chico's, together with her
husband, Marvin J. Gralnick, and has served the Company in various senior
executive capacities throughout its history. She was first elected Vice
President/Secretary in 1983. Ms. Gralnick was elected as Senior Vice
President -- Merchandise Concept in 1992. In September 1993, Ms. Gralnick
stepped down from all officer positions with the Company. In connection with the
resignation of Jeffrey J. Zwick as Chief Executive Officer, President and a
director of the Company in November 1994, Ms. Gralnick returned to the Company
on a full time basis to head up merchandise design, marketing and image for the
Company. In February 1995, Ms. Gralnick was elected as Senior Vice
President -- Design and Concept.
Director since 1983.
VERNA K. GIBSON, 54, presently is a retailing consultant. From 1993 through
1997, she was a partner of Retail Options, Inc., a business advisory firm
founded in June 1993. Ms. Gibson also serves as a director of The Caldor
Corporation, Today's Man, Inc., Mothers Work, Inc. and the National Retail
Federation. Ms. Gibson has over 30 years of experience in women's apparel
retailing including having served from 1985 to 1991 as President of Limited
Stores, Inc., Cacique, Inc. and Limited Too, Inc., all of which were
subsidiaries of The Limited, Inc., a retail apparel specialty chain. From
January 1991 through 1995, she was President of Outlook Consulting,
International, Inc. and from December 1994 to July 1996, Ms. Gibson was the
Chairman of the Board of Petrie Retail, Inc. On October 12, 1995, Petrie Retail,
Inc. filed a voluntary petition for bankruptcy protection under Chapter 11 of
the Federal Bankruptcy Code.
Director since 1993.
MEETINGS OF THE BOARD OF DIRECTORS AND STANDING COMMITTEES
The Board of Directors held six meetings during fiscal 1999. In fiscal
1999, each incumbent Director attended at least 75% of the total number of Board
and Committee meetings.
The Board of Directors has a standing Audit Committee and Compensation and
Benefits Committee but does not have a Nominating Committee. The Board of
Directors functions as a Nominating Committee, and the Board will consider
written recommendations from stockholders for positions on the Board of
Directors in accordance with the procedures set forth in the Amended and
Restated Articles of Incorporation of the Company. See -- "Stockholder Proposals
for Presentation at the 2000 Annual Meeting" for further information.
The current members of the Audit Committee are Mr. Burden, Ms. Gibson and
Mr. Roeder. The Audit Committee held two meetings during fiscal 1999. The Audit
Committee's principal responsibilities are to recommend annually a firm of
independent certified public accountants to the Board of Directors, to review
the annual audit of the Company's financial statements and to meet with the
independent certified public accountants of the Company from time to time in
order to review the Company's internal controls and financial management
practices.
The current members of the Compensation and Benefits Committee are Mr.
Burden, Ms. Gibson and Mr. Roeder. The Compensation and Benefits Committee held
three meetings during fiscal 1999. The principal responsibilities of the
Compensation and Benefits Committee are to review and make recommendations to
the Board of Directors concerning the compensation of all officers of the
Company; to review and make recommendations with respect to the Company's
existing and proposed compensation plans, and to serve as the committee
responsible for administering the Company's 1992 Stock Option Plan, the
Company's 1993 Stock Option Plan and the Company's 1993 Employee Stock Purchase
Plan.
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COMPENSATION OF DIRECTORS
Base Compensation. In fiscal 1999, nonemployee directors were entitled to
receive $3,000 per quarter plus $500 for each Board meeting and $500 for each
committee meeting physically attended or held by telephone and whether or not
coinciding with a Board meeting. In addition, all directors were entitled to
receive reimbursement of reasonable out-of-pocket expenses incurred in
connection with meetings of the Board of Directors or committees thereof; no
additional per meeting fees will be paid. Beginning in fiscal 2000, nonemployee
directors will receive $6,000 per quarter to cover all Board and committee
meetings. All directors will continue to be entitled to reimbursement of their
reasonable out-of-pocket expenses.
Options. Each non-employee director receives an automatic grant each year
following the annual meeting of stockholders of options to purchase 10,000
shares of common stock. For fiscal 1999, Ms. Gibson and Messrs. Burden and
Roeder received grants under this plan. Each such option grant, which vested in
full on December 9, 1998 and has a ten-year term, permits the holder to purchase
shares at their fair market value on the date of grant, which was $12.8125 in
the case of these particular options. In addition, in February 1998, Ms. Gibson
and Messrs. Burden and Roeder received separate grants of options to purchase
25,000 shares, 10,000 shares and 10,000 shares, respectively. Each of these
separate grants vested in full on August 10, 1998, has a ten year term and
permits the holder to purchase shares at their fair market value on the date of
grant, which was $6.50 in the case of these particular options.
Indemnification. We indemnify our directors and officers to the fullest
extent permitted by law so that they will serve free from undue concern that
they will not be indemnified. This is authorized under our By-laws, and
accordingly we have signed agreements with each of those individuals
contractually obligating us to provide this indemnification to them.
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS -- ITEM TWO ON YOUR PROXY CARD
The firm of Arthur Andersen LLP has been our independent certified public
accountants for many years. Arthur Andersen LLP has been recommended by the
Audit Committee and approved by the Board of Directors as our independent
certified public accountants for the year ending January 29, 2000, subject to
ratification of such appointment by the stockholders. Representatives of Arthur
Andersen LLP are expected to be present at the Annual Meeting of Stockholders.
They will have the opportunity to make a statement if they desire to do so and
are expected to be available to respond to appropriate questions by
stockholders. Ratification of the Company's independent certified public
accountants is not required by the Company's By-Laws or otherwise, but the Board
of Directors has decided to seek such ratification as a matter of good corporate
practice.
The persons named in the enclosed form of proxy intend, unless otherwise
directed, to vote such proxy "FOR" ratification of the appointment of Arthur
Andersen LLP as independent certified public accountants for the period
specified. If the stockholders do not ratify this appointment, other certified
public accountants will be considered by the directors upon recommendations of
the Audit Committee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF ARTHUR ANDERSEN
LLP AS OUR INDEPENDENT AUDITORS FOR THE PERIOD SPECIFIED.
3. PROPOSAL TO APPROVE THE NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN -- ITEM
THREE ON YOUR PROXY CARD
In order to be in a position to continue to effectively attract and retain
members of the Board of Directors who are not employees of the Company or its
subsidiaries (the "Non-Employee Directors"), the Board of Directors adopted the
Chico's FAS, Inc. Non-Employee Directors' Stock Option Plan, in October 1998,
subject to approval of the stockholders at the Annual Meeting of Stockholders.
The Board recommends that you vote "FOR" approval of the Non-Employee
Directors' Stock Option Plan (the "Directors' Stock Option Plan"). The
Directors' Stock Option Plan will be approved if the votes
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cast "FOR" approval of the Directors' Stock Option Plan by holders entitled to
vote exceed the votes cast opposing the approval of the Directors' Stock Option
Plan.
Summary of the Directors' Stock Option Plan
Under the Directors' Stock Option Plan, Non-Employee Directors will be
eligible to receive nonqualified stock options. No other individual is eligible
to receive options under the plan. In addition to receiving options under the
plan, Non-Employee Directors will continue to be compensated for their services
as directors. For a description of such compensation, see "Compensation of
Directors".
An aggregate of 150,000 shares of Common Stock have been reserved for
issuance under the plan. The plan is administered by the full Board of Directors
or by a committee of two or more members of the Board, as may be designated as
such by the Board (in whichever case, herein referenced as the "Directors Stock
Option Plan Committee").
All Non-Employee Directors are eligible to receive options under the plan.
Each Non-Employee Director will automatically be granted an option for 10,000
shares of Chico's common stock upon his or her appointment to the Board. In
addition, each year, as of the date of the Company's Annual Meeting of
Stockholders, each Non-Employee Director who is then reelected or who is
continuing as a member of the Board following the Annual Meeting shall receive
an option for 10,000 shares of Chico's common stock. There is no limit as to the
number of options that may be granted any one eligible individual. The Directors
Stock Option Plan Committee may also make discretionary grants of options to
Non-Employee Directors from time to time. The Company will not receive any
consideration for the granting of the options under the plan, other than the
services rendered to the Company by the Non-Employee Director in that capacity.
The per share exercise price of each of the options automatically granted
under the plan may not be less than the fair market value of the stock on the
date of grant. On April 1, 1999, the reported last sale price of the Company's
Common Stock on the Nasdaq National Market System was $22.50.
Options automatically granted under the plan will become fully vested six
months after the date of the grant, and will be exercisable for up to ten years
after the date of the grant. Discretionary options granted under the plan will
have such exercise price, vesting schedule and other terms and conditions as
shall be determined by the Directors Stock Option Plan Committee at the time of
each respective grant.
If exercised, an option must be exercised within the exercise period by
payment of the option price in cash, by check or by other means prescribed by
the Directors Stock Option Plan Committee.
If the individual's affiliation with the Company as a director is
terminated during the term of the option, the end of the option period will be
accelerated. Notwithstanding the foregoing general rules, the committee may
issue options for shorter periods of time and may permit the earlier exercise of
outstanding options.
An individual may not transfer any option granted under the plan, although,
in some circumstances after the individual's death, the individual's personal
representative may exercise the option and, in certain other circumstances,
options can be exchanged for new options.
The aggregate number of shares covered by the plan, as well as the number
of shares covered by outstanding options (and the per share purchase price
thereof) are subject to automatic adjustment, without further action of the
Board of Directors, the Directors Stock Option Plan Committee or the
stockholders, in the event of a stock dividend, a stock split or certain other
recapitalizations with respect to the Company's stock.
The Board of Directors may amend the plan (or suspend or discontinue it)
without further stockholder approval. No amendment may adversely affect any then
outstanding option.
The plan will continue for 10 years, unless the Board of Directors votes to
terminate the plan at some earlier time.
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Federal Income Tax Consequences
Because all options under the plan will be nonqualified stock options and
because the Company does not anticipate that any such options will have a
readily ascertainable fair market value when issued, the recipient of such an
option should not recognize any taxable income or loss for federal income tax
purposes at the time the option is granted. The exercise of the nonqualified
stock option will, however, result in the immediate recognition of taxable
income by its holder at ordinary income rates based on the difference between
the purchase price for shares covered by the option and the fair market value of
the shares received at the time of exercise. The Company will receive a
corresponding income tax deduction at the same time. Additional gain or loss,
determined under general rules of taxation, may be realized upon the sale of the
shares.
The specific application and impact of the tax rules may vary depending on
the personal situation of individual directors.
4. PROPOSAL TO RATIFY THE AMENDMENT OF THE 1993 EMPLOYEE STOCK PURCHASE
PLAN -- ITEM FOUR ON YOUR PROXY CARD
The Company's 1993 Employee Stock Purchase Plan (the "Stock Purchase Plan")
became effective upon the consummation of the Company's initial public offering
on March 24, 1993. The purpose of the Stock Purchase Plan is to provide the
Company's employees with an opportunity, through the purchase of stock, to
become part owners of the Company, or to increase the amount of their stock
ownership. The Company believes that employees finding themselves in the dual
roles of part owners and employees will have every reason to do all that they
can to maintain and increase the success of the Company.
The Amendment
As originally adopted, the Stock Purchase Plan provided for twelve offering
periods, with the first offering period being the 61 days ending May 31, 1993
and the remaining eleven offering periods consisting of each of the months of
May and November in the years 1993 through 1998. In October 1998, the Board of
Directors approved, subject to stockholder ratification at the 1999 Annual
Meeting of Stockholders, an amendment to the Stock Purchase Plan to increase the
number of offering periods under the plan from twelve to eighteen, with offering
periods to continue in each of the months of May and November through and until
November 2001.
The Board recommends that you vote "FOR" ratification of the amendment to
the 1993 Employee Stock Purchase Plan (the "Second Amendment"). The Second
Amendment will be ratified if the votes cast "FOR" ratification of the Second
Amendment by holders entitled to vote exceed the votes cast opposing the
ratification of the Second Amendment.
Summary of the Plan
An aggregate of 210,000 shares of Common Stock have been reserved for
issuance under the Stock Purchase Plan. As of April 1, 1999, 116,999 shares had
been purchased under the Stock Purchase Plan and 93,001 shares remain reserved
for issuance under the Stock Purchase Plan. Under the Stock Purchase Plan, as
amended, which is intended to qualify under the provisions of Section 423 of the
Internal Revenue Code, all eligible employees are given the right to purchase
shares of the Common Stock of the Company two times a year at a price equal to
85% of the value of the stock immediately prior to the beginning of each
exercise period. On April 1, 1999, the closing price of the Company's Common
Stock on the Nasdaq National Market was $22.50.
All employees are eligible to participate except for those who have been
employed by the Company for less than one year, employees who customarily work
20 hours or less per week, employees who customarily work five months or less
per year, and employees owning at least 5% of the Company's common stock. Rights
to acquire common stock are to terminate if the employee's employment is
terminated for any reason, and the rights are not to be transferable by the
employees. No consideration will be received by the Company for the
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granting of the right to acquire common stock under the Stock Purchase Plan
other than the services rendered to the Company by the employee in such
capacity.
The Stock Purchase Plan, as amended, provides for two exercise
periods -- the month of May and the month of November -- in each year through
2001.
During each exercise period, an eligible employee is entitled to purchase
one share of Common Stock of the Company for each $300 of compensation received
by him or her for the Company's fiscal year preceding the exercise period.
However, no eligible employee is entitled to purchase fewer than 10 shares or
more than 600 shares in any one exercise period. Within these limits, an
eligible employee is able to elect to purchase as many or as few shares in each
exercise period as he or she chooses.
Payment for the shares is required in cash or by check at the time of the
exercise of the rights.
The Stock Purchase Plan is administered by the Compensation and Benefits
Committee whose members are Verna K. Gibson, Ross E. Roeder and John K. Burden,
none of whom are eligible to participate in the Plan.
Federal Income Tax Consequences
Generally, no gain or loss is recognized until the stock is sold or
otherwise disposed of by its owner.
If the shares acquired under the Stock Purchase Plan are held by the
employee for the holding period required by the Internal Revenue Code (two years
from the beginning of the exercise period in which the shares were acquired),
upon the disposition of the stock, the employee will recognize ordinary income
(as compensation) to the extent of the lesser of: (i) the amount by which the
fair market value of the stock at the beginning of the exercise period exceeded
85% of such fair market value or (ii) the amount by which the fair market value
of the stock at the time of disposition exceeds the purchase price. Any further
gain will be taxed as a capital gain. If the sales price is less than the
purchase price, there will be no ordinary income; and the employee will
recognize a long-term capital loss equal to the difference between the purchase
price and the disposition price. If the holding period is satisfied, the Company
will not be entitled to an income tax deduction at any time.
If the two-year holding period is not satisfied, the employee will
generally recognize in gross income (as compensation) in the year of disposition
the amount by which the fair market value of the stock on the date of transfer
exceeded the purchase price. Any difference between the fair market value of the
stock on the date of transfer and the sales price upon disposition will be taxed
as a capital gain or loss. The Company will be entitled to an income tax
deduction in the year of disposition equal to the amount of ordinary income
recognized by the employee.
The specific application and impact of the tax rules will vary depending on
the specific personal situation of individual employees.
5. PROPOSAL TO RATIFY THE AMENDMENT OF THE 1993 STOCK OPTION PLAN -- ITEM FIVE
ON YOUR PROXY CARD
In 1993, the Board of Directors and stockholders of the Company adopted the
Chico's FAS, Inc. 1993 Stock Option Plan. The purpose of the 1993 Stock Option
Plan is to enable the Company to be in a position to continue to effectively
attract and retain executive officers and other key employees.
The Amendment
The 1993 Stock Option Plan as in existence prior to the amendment covered a
maximum of 680,000 shares of Common Stock. The Board of Directors has determined
that the number of shares remaining under the plan is insufficient to continue
to meet the Company's needs of attracting and retaining executive officers and
other key employees. As a result, the Board of Directors has approved, subject
to stockholder ratification at the 1999 Annual Meeting of Stockholders, an
amendment to the 1993 Stock Option Plan increasing the
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number of shares of Common Stock that may be issued upon exercise of options by
500,000 to a maximum of 1,180,000.
The Board recommends that you vote "FOR" ratification of the amendment of
the 1993 Stock Option Plan (the "1993 Option Plan Amendment"). The 1993 Option
Plan Amendment will be ratified if the votes cast, "FOR" ratification of the
1993 Option Plan Amendment by holders entitled to vote exceed the votes cast
opposing the ratification of the 1993 Option Plan Amendment.
Summary of the Plan
An aggregate of 1,180,000 shares of Common Stock have been reserved for
issuance under the 1993 Option Plan, as amended (the "Amended 1993 Option
Plan"). Under the Amended 1993 Option Plan, incentive stock options,
nonqualified stock options or any combination thereof are granted to eligible
individuals. The Amended 1993 Option Plan is administered by the Compensation
and Benefits Committee whose members currently are Verna K. Gibson, John Burden
and Ross E. Roeder, none of whom are eligible to participate in the Amended 1993
Option Plan.
All officers of the Company and other employees who have executive or
supervisory responsibility are eligible to receive options under the Amended
1993 Option Plan, except with respect to incentive stock options for any
employees ineligible by reason of the provisions of Section 422 of the Internal
Revenue Code (e.g., a employee owning or who would own upon the exercise of the
option more than 10% of the outstanding common stock of the Company, unless the
option price is at least 110% of the fair market value of the Common Stock
subject to the option and the option is not exercisable after five years from
the date of grant). No consideration will be received by the Company for the
granting of the options under the Amended 1993 Option Plan other than the
services rendered to the Company by the employee in such capacity.
The aggregate number of shares covered by the Amended 1993 Option Plan, as
well as the number of shares covered by outstanding options (and the per share
purchase price thereof) are subject to automatic adjustment, without further
action of the Board of Directors or the stockholders, in the event of a stock
dividend, a stock split or certain other recapitalizations with respect to the
Company's stock.
The Board of Directors may amend the Amended 1993 Option Plan (or suspend
or discontinue it) without further stockholder approval, except with respect to
certain major changes such as changing the number of shares subject to the
Amended 1993 Option Plan, the minimum option price or the class of employees
eligible to receive options, removing the administration of the Amended 1993
Option Plan from the committee or amending the Amended 1993 Option Plan in any
other way so that incentive stock options granted thereunder would fail to
qualify under Section 422 of the Internal Revenue Code. No amendment may
adversely affect any then outstanding option.
The Amended 1993 Option Plan will continue for 10 years from the date of
its original adoption (i.e., through 2003), unless the Amended 1993 Option Plan
terminates earlier upon the granting of options covering 1,180,000 shares
(options that are forfeited may be reissued by the committee).
INCENTIVE STOCK OPTIONS. The per share exercise price of each incentive
stock option may not be less than the fair market value of the stock on the date
of grant or, in the case of an employee owning more than 10% of the outstanding
Common Stock of the Company, not less than 110% of such fair market value. Also,
the aggregate fair market value of the stock with respect to which options are
exercisable for the first time by an employee in any calendar year may not
exceed $100,000.
NONQUALIFIED STOCK OPTIONS. The per share exercise price of each
nonqualified stock option may not be less than the fair market value of the
stock on the date of grant.
If exercised, an option must be exercised within the exercise period by
payment of the option price in cash, by check or by other means prescribed by
the committee.
No option is exercisable within one year from the date of grant or more
than 10 years after the date of grant, or, in the case of an individual who owns
more than 10% of the outstanding common stock of the Company, more than five
years after the date of grant. Each option is exercisable in stock of the
Company.
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Options are exercisable based on vesting schedules established by the committee
administering the Amended 1993 Option Plan. Options may not be exercisable any
more rapidly than in cumulative installments of one third of the number of
shares covered by the option every year beginning on the first anniversary from
the date of grant and continuing annually for a period of three years
thereafter. If the individual's affiliation with the Company as an employee is
terminated during the term of the option, the end of the option period will be
accelerated. Notwithstanding the foregoing general rules, the committee may
issue options for shorter periods of time and may permit the earlier exercise of
outstanding options.
An individual may not transfer any option granted under the Amended 1993
Option Plan, although in some circumstances after the individual's death, the
individual's personal representative may exercise the option and, in certain
other circumstances, options can be exchanged for new options.
On April 1, 1999, the reported last sale price of the Company's Common
Stock on the Nasdaq National Market System was $22.50.
Federal Income Tax Consequences
The recipient of an incentive stock option should not recognize any taxable
income or loss for federal income tax purposes at the time the incentive stock
option is granted or exercised; however, upon exercise, the difference between
the stock purchase price set forth in the option and the fair market value of
the shares received may be subject to the alternative minimum tax. If the Common
Stock purchased upon the exercise of an incentive stock option is held for at
least two years after the granting of the option and at least one year after
exercise, the recipient should receive a long term capital gain or loss upon the
sale or disposition of the Common Stock based on the difference between the fair
market value of the Common Stock on the date of sale or other disposition and
the purchase price of the Common Stock under the option. The Company will not be
entitled to any deductions with respect to the granting or exercise of the
incentive stock option in such cases.
If the recipient of an incentive stock option does not hold the shares for
two years after the grant of the option and one year after exercise, the
recipient will generally recognize as ordinary income in the year of disposition
the difference between (1) the purchase price of Common Stock covered by the
option and (2) the lesser of the sales price or the fair market value of the
shares on the date of exercise; and the Company will be entitled to a
corresponding deduction for such amount in that year. Any remaining gain would
be taxable to the recipient as capital gain. However, if the sales price is less
than the purchase price under the option, no income will be recognized; the
recipient would generally realize a capital loss equal to the difference between
the purchase price and the disposition price; and the Company will not receive
any deduction.
The general rules described in the preceding paragraph apply only when the
sale is made to an unrelated party. If the recipient makes a sale or other
disposition to certain related persons or entities before the end of the
applicable holding periods, then the recipient will be treated as having
received ordinary income (with a corresponding deduction to the Company) in the
year of disposition in an amount equal to the difference between the sales price
and the fair market value of the shares on the date of exercise (even if the
fair market value of the shares is less on the date of sale or other
disposition).
Because the Company does not anticipate that any nonqualified stock option
will have a readily ascertainable fair market value when issued, the recipient
of such an option should not recognize any taxable income or loss for federal
income tax purposes at the time the option is granted. The exercise of the
nonqualified stock option, however, will result in the immediate recognition of
taxable income by its holder at ordinary income rates based on the difference
between the purchase price for shares covered by the option and the fair market
value of the shares received at the time of exercise. The Company will receive a
corresponding deduction at the same time. Additional gain or loss, determined
under general rules of taxation, may be realized upon the sale of the shares.
The specific application and impact of the tax rules will vary depending on
the specific personal situation of individual option recipients.
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PLAN BENEFITS TABLE -- NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN, AMENDED 1993
EMPLOYEE STOCK PURCHASE PLAN AND AMENDED 1993 STOCK OPTION PLAN
The following table provides information regarding the number and value of
the securities to be granted or purchased under the non-employee directors'
stock option plan, the amended 1993 employee stock purchase plan and the amended
1993 stock option plan.
NON-EMPLOYEE AMENDED 1993
DIRECTORS' EMPLOYEE AMENDED 1993
STOCK OPTION PLAN STOCK PURCHASE PLAN STOCK OPTION PLAN
----------------------- ----------------------- -----------------------
NUMBER NUMBER NUMBER
NAME AND POSITION DOLLAR VALUE OF UNITS DOLLAR VALUE OF UNITS DOLLAR VALUE OF UNITS
----------------- ------------ -------- ------------ -------- ------------ --------
Marvin J. Gralnick,
Chairman of the Board, Chief
Executive Officer and President... * * * * (3) (3)
Charles J. Kleman,
Executive Vice
President -- Finance, Chief
Financial Officer................. * * (2) (2) (3) (3)
Helene B. Gralnick,
Senior Vice President -- Design
and Concept....................... * * * * (3) (3)
Scott A. Edmonds,
Senior Vice
President -- Operations........... * * (2) (2) (3) (3)
Executive Group(4).................. * * (2) (2) (3) (3)
Non-Executive Director Group........ (1) (1) * * * *
Non-Executive Officer Employee
Group............................. * * (2) (2) (3) (3)
- ---------------
* Not eligible for participation
(1) The grant of options under the Non-Employee Directors' Stock Option Plan
will generally occur automatically, in the amount of 10,000 options upon the
director's initial appointment to the Board, and 10,000 options each year
thereafter during the director's continued service. The Board of Directors
has discretion to make additional grants under the plan, but the Company
cannot determine the nature or amount of any discretionary awards that will
be made in the future. During fiscal 1999, 30,000 stock options would have
been granted under the plan had it been in effect at the time of the
Company's last Annual Meeting of Stockholders. The dollar value of such
stock options cannot be determined.
(2) Participation in the 1993 Employee Stock Purchase Plan is voluntary. The
Company cannot determine the amount of shares that will be purchased in the
future. During fiscal 1999, 600 shares were purchased under this plan by
each of Messrs. Kleman and Edmonds, respectively. In fiscal 1999, 1,200
aggregate shares and 33,575 aggregate shares of Common Stock were purchased
under this plan by the Executive Group and the Non-Executive Officer
Employee Group, respectively. The dollar values of the shares purchased by
Messrs. Kleman and Edmonds determined using the fair market value of the
Company's Common Stock of $22.50 per share as of April 1, 1999 are $13,500,
and $13,500, respectively. In addition, the dollar values of the aggregate
shares purchased by the Executive Group and Non-Executive Officer Employee
Group determined using the fair market value of the Company's Common Stock
of $22.50 per share as of April 1, 1999 are $27,000 and $755,438,
respectively.
(3) The grant of options under the Amended 1993 Stock Option Plan is entirely
within the discretion of the Compensation and Benefits Committee. The
Company cannot determine the nature or amount of awards that will be made in
the future. For information regarding grants of options in fiscal 1999 to
Messrs. Gralnick, Kleman and Edmonds and to Ms. Gralnick, see the Summary
Compensation Table, Option/SAR Grants Table and Option/SAR Exercises and
Year-End Value Table. During fiscal 1999, 80,000 stock options and 55,750
stock options were granted under this plan to the Executive Group and
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Non-Executive Officer Employee Group, respectively. The dollar value of such
stock options cannot be determined.
(4) Consists of the 4 executive officers listed above.
OTHER BUSINESS
It is not expected that any other matters are likely to be brought before
the meeting. However, if any other matters are presented, it is the intention of
the persons named in the proxy to vote the proxy in accordance with their best
judgment.
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COMPENSATION COMMITTEE REPORT
To: The Board of Directors
OVERVIEW AND PHILOSOPHY
The Compensation Committee of the Board of Directors (the "Compensation
Committee") is composed of three members, each of whom is an outside director of
the Company. The Compensation Committee provides overall guidance on the
Company's compensation and benefits philosophy. In addition, the Committee
approves and monitors the Company's
- executive compensation and benefits programs
- executive employment agreements
- stock option plan
- profit sharing plan
- stock purchase plan
The primary objectives of the Compensation Committee are to assure that the
Company's executive compensation and benefits program
- reflects the Company's unique, entrepreneurial, customer-focused,
orientation
- is competitive with other profitable, growing specialty retail companies
- safeguards the interests of the company and its stockholders
- is effective in driving performance to achieve financial goals and create
stockholder value
- fosters teamwork on the part of management
- is cost-effective and fair to employees, management, and stockholders
- is well communicated and understood by program participants
The Company's executive compensation policies are designed to attract,
motivate, and retain highly qualified executive officers who can enhance
stockholder value, and to support a performance-oriented environment that
rewards achievement of the Company's planned financial goals. The Compensation
Committee meets periodically during each fiscal year to review the Company's
existing compensation and benefits programs and to consider modifications that
seek to provide a direct relationship between executive compensation and
sustained corporate performance.
The Company compensates its executive officers through three principal
types of compensation: annual base salary, annual incentive bonuses and
long-term incentive awards through stock options. The Company, as a matter of
policy, places substantial emphasis on incentive bonuses and long-term stock
options since these two forms of compensation are viewed as very effective at
correlating executive officer compensation with corporate performance and
increases in stockholder value.
In addition to the three types of compensation just mentioned, certain
executive officers are eligible to participate in the Company's Employee Stock
Purchase Plan.
BASE SALARY
The annual base salary of each executive officer is based on the scope of
his or her responsibility and accountability within the Company, as well as on
performance and experience criteria. In addition, the Compensation Committee
considers salary and other compensation arrangements of other speciality
retailers of similar size and similar growth to determine appropriate levels
required to attract, motivate, and retain the most qualified management
personnel.
The Compensation Committee believes that the Company's most direct
competitors for executive talent are not necessarily all of the companies that
would be included in a peer group established to compare stockholder returns.
Thus, the compensation peer group is not the same as the peer group index in the
"Comparison of Cumulative Total Return" graph included in this proxy statement.
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The Compensation Committee, upon the recommendation by the Chief Executive
Officer, determines and makes final decisions regarding base salary of
executives on an annual basis. The Compensation Committee recognizes that, to
some degree, the determination of an executive officer's base salary involves
subjective considerations.
INCENTIVE BONUSES
A significant component of an executive officer's total cash compensation
consists of an incentive bonus, which is intended to make the executive
compensation dependent on the Company's performance and to provide executive
officers with incentives to achieve Company goals, increase stockholder value,
and work as a team. The bonuses are based on the Company's achievement of its
targeted pre-tax income goal, which is part of the Company's overall plan. The
pre-tax income goal, as well as the overall plan, is reviewed and approved by
the Compensation Committee prior to the start of each bi-annual period. To
encourage high levels of performance, the targeted pre-tax income goal is
established at a level which builds in, among other things, a conservatively
aggressive growth in sales and comparable store sales.
Bonuses are awarded to the executive team based on the Company's attainment
of specific pre-determined pre-tax income levels relative to the targeted
pre-tax income goal established in the Company's overall plan. If the Company
does not match its minimum pre-tax income goal level, then no bonuses are
awarded. Through the end of 1995, bonuses were awarded on a quarterly basis.
Beginning in 1996 and through the end of fiscal 1999, bonuses have been awarded
on a bi-annual basis. The executive team was awarded a total of approximately
$616,080 in fiscal 1999 ended January 30, 1999.
LONG TERM STOCK OPTION COMPENSATION
The Compensation Committee believes that providing key employees, including
executive officers, with the opportunity to acquire stock ownership over time is
the most desirable way to align their interests with those of the Company's
stockholders. Stock options, awarded under the Company's 1992 and 1993 Stock
Option Plans and in some limited cases outside of the plans pursuant to separate
individual stock option agreements, provide an incentive that focuses the
attention of executive officers on managing the Company from the perspective of
an owner with an equity interest in the business. In addition, stock options are
a key part of the Company's program for motivating and rewarding managers over
the long term. Stock options granted to key employees are tied to future
performance of the Company's stock and will provide value only when the price of
the Company's stock exceeds the option grant price.
The Compensation Committee, upon the recommendation by the Chief Executive
Officer, determines and makes final decisions regarding stock option awards made
under the Company's plan. Such factors as performance and responsibilities of
individual managers and the management team as a whole as well as general
industry practices play an integral role in the determination of the number of
options awarded to a particular senior executive. In determining the size of the
individual award of options, the Compensation Committee also considers the
amounts of options outstanding and previously granted, the amount of options
remaining available for grant under the Stock Option Plans, the aggregate amount
of current awards, and the amount necessary to retain qualified management.
In accordance with its business strategy and compensation philosophy, the
Company has granted stock options to a significant number of employees in
managerial positions to afford them an opportunity to participate in the
Company's future growth and to focus them on the contributions which are
necessary for the financial success and business growth of the Company and,
thereby, the creation of value for its Stockholders. In fiscal 1999 ended
January 30, 1999, a total of 135,750 options were granted to employees,
including 80,000 options which were awarded to senior executives.
Stock options are typically awarded each year based on an assessment of
each recipient's ongoing contribution to overall corporate performance. As a
means to encourage a stock option recipient to remain in service with the
company, stock option awards vest over time, in equal amounts over a period of
three years from the date of grant. All stock options have exercise prices at
least equal to the market value of the Company's stock on the date of grant.
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PROFIT SHARING PLAN, 401(k) PLAN AND STOCK PURCHASE PLAN FOR EMPLOYEES
In 1992, the Company adopted a profit sharing plan to provide a means for
all eligible employees at all levels of the Company to share in the Company's
profits and accumulate retirement savings. The Company's contribution to the
profit sharing plan for each year has been determined by the discretion of the
Company's Board of Directors. Contributions to the profit sharing plan have been
made out of the Company's profits to reward employees for their collective
efforts in producing profits, based on the amount it deemed appropriate in light
of the results of the Company's operations for the year. In fiscal 1999, the
Company accrued a contribution of approximately $471,000 to its profit sharing
plan, which amounted to approximately 3.1% of its pre-tax profits for fiscal
1999.
Effective as of January 1, 1999, the Company incorporated a 401(k) feature
into its profit sharing plan as a further means for all eligible employees at
all levels of the Company to accumulate retirement savings. Under the 401(k)
aspect of the plan, eligible employees can elect to defer up to 20% of their
respective compensation and have it contributed to the plan. The Company is
obligated to match a portion of the deferral and can elect to make additional
contributions over and above the mandatory match, based on the amount it deems
appropriate in light of the results of the Company's operations for the
respective year.
In 1993, the Company adopted a stock purchase plan to provide all eligible
employees at all levels an opportunity to become stockholders of the Company.
This plan is viewed as an effective way to help align the interest of all
employees with those of the Company's stockholders. As an inducement, eligible
employees may purchase shares of stock in the Company at a 15% discount to the
value of the stock established during the exercise period. In fiscal 1999, the
stock purchase plan was extended on the same terms until November of 2001.
FISCAL 1999 COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER
The general policies described above for the compensation of the executive
officers also apply to the compensation approved by the Compensation Committee
with respect to the fiscal 1999 compensation for Mr. Gralnick, the Company's
Chairman of the Board and Chief Executive Officer.
Mr. Gralnick's base salary was increased to $350,000 in fiscal 1999, which
reflected a $50,000 increase from his base salary in fiscal 1998. In fiscal
1999, Mr. Gralnick also was awarded an aggregate bonus of $272,080, as a result
of the Company having reached certain targeted performance incentive goals.
Notwithstanding Mr. Gralnick's substantial ownership position in the Company,
the Compensation Committee awarded him 50,000 stock options in fiscal 1999 in
order to continue to recognize his efforts in leading the Company in achieving a
very strong financial performance.
Mr. Gralnick's compensation was based on industry comparisons as well as on
the Company's performance over the most recent years, as reflected in the
Company's Annual Report to Stockholders which accompanies this proxy statement.
In addition, in fiscal 1997, the Company had engaged the services of an
independent executive compensation firm to assess the compensation package of
Mr. Gralnick and of the other members of the senior management team. The
compensation firm considered the nature and scope of each manager's
responsibilities relative to comparable companies in analyzing management
compensation. Mr. Gralnick's compensation continues to take into account the
report of the independent executive compensation firm.
Under the leadership of Mr. Gralnick and the rest of the management team,
total revenues for Chico's increased from approximately $16 million in 1990 to
approximately $106.7 million in fiscal 1999. Between 1990 and fiscal 1999,
pre-tax income grew from a loss of approximately $289,000 to a profit of $15.0
million, and net income grew from a loss of $186,000 to a profit of $9.1
million, or $1.07 diluted earnings per share.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(m)
The Compensation Committee has reviewed the applicability of Section 162(m)
of the Internal Revenue Code of 1986, as amended (the "Code"), which disallows a
tax deduction for compensation to an executive officer when the included
compensation exceeds $1 million per year. No executive officer of the Company
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exceeded this threshold in fiscal 1999 and the Compensation Committee does not
anticipate that any executive officer of the Company will exceed this threshold
during fiscal 2000. The Committee intends to periodically review the potential
consequences of Section 162(m) and, depending upon the risk of applicability of
this provision to the Company, may elect to structure the performance-based
portion of its executive officer compensation in a manner so as to comply with
certain exemptions provided for in Section 162(m).
This report has been provided by the Compensation Committee.
COMPENSATION AND BENEFITS COMMITTEE:
John W. Burden
Verna K. Gibson
Ross E. Roeder
PERFORMANCE GRAPH
The following graph compares the cumulative total return on the Company's
Common Stock with the cumulative total return of the companies in the Standard &
Poor's 500 Index and the S&P 500 Retail Stores -- Specialty-Apparel Industry
Index. Cumulative total return for each of the periods shown in the Performance
Graph is measured assuming an initial investment of $100 on January 29, 1994 and
the reinvestment of dividends. The performance graph reflects the change in the
Company's year end from the Sunday closest to December 31 to the Saturday
closest to January 31 and uses pro forma fiscal year end dates for periods prior
to the 1997 fiscal year.
COMPARISON OF CUMULATIVE TOTAL RETURN
(CHART)
RETAIL
(SPCLTY-
MEASUREMENT PERIOD CHICOS S&P 500 APPAREL)-
(FISCAL YEAR COVERED) FAS INC INDEX 500
29-JAN-94 100.00 100.00 100.00
28-JAN-95 44.09 104.97 100.87
3-FEB-96 25.98 145.47 120.10
1-FEB-97 25.20 183.74 149.96
31-JAN-98 44.49 233.16 272.24
30-JAN-99 192.13 308.91 563.65
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EXECUTIVE OFFICERS AND KEY EMPLOYERS
The following table sets forth certain information regarding the Company's
continuing executive officers, continuing directors, nominees for director and
certain other key employees.
YEARS WITH
THE
AGE POSITION COMPANY
--- -------- ----------
EXECUTIVE OFFICERS
Marvin J. Gralnick.................... 64 Chief Executive Officer, President,
Chairman of the Board and Director 15
Helene B. Gralnick.................... 51 Senior Vice President -- Design and
Concept and Director 15
Charles J. Kleman..................... 48 Executive Vice President -- Finance,
Chief Financial Officer,
Secretary/Treasurer and Director 10
Scott A. Edmonds...................... 41 Senior Vice President -- Operations
and Assistant Secretary 5
CERTAIN KEY EMPLOYEES
Mori C. MacKenzie..................... 49 Director of Stores 3
Patricia A. Murphy.................... 55 General Merchandise Manager 1
NON-DIRECTOR EXECUTIVE OFFICER AND CERTAIN KEY EMPLOYEES
Scott A. Edmonds has been employed by Chico's since September 1993, when he
was hired as Operations Manager. In February 1994, he was elected to the
position of Vice President -- Operations and effective January 1, 1996 he was
promoted to the position of Senior Vice President -- Operations. Mr. Edmonds is
responsible for human resources, store development and operations, leasing and
maintenance, franchise operations, and management of the headquarters and
woodshop. From March 1985 until September 1993, he was President/General Manager
of the Ft. Myers branch of Ferguson Enterprises, Inc. an electric and plumbing
wholesaler.
Mori C. MacKenzie has been with the Company since October 1995, when she
was hired as the Director of Stores. Ms. MacKenzie is responsible for store and
field operations management, hiring and training. From January 1995 until
October 1995, Ms. MacKenzie was the Vice President of Store Operations for
Canadians Corporation. From August 1994 until December 1994, she was the Vice
President of Store Development for Goody's Family Clothing. From April 1992
until August 1994, Ms. MacKenzie was the Vice President of Stores for United
Retail Group ("URG") and from August 1991 until April 1992 she was employed by
Conston Corp., a predecessor of URG. In addition, Ms. MacKenzie was Vice
President-Stores for Park Lane from November 1987 until July 1991, and was
Regional Director of Stores for the Limited, Inc. from June 1976 until October
1987.
Patricia A. Murphy has been with the Company since September 1997, when she
was hired as the Senior Merchant. In April 1998, she was promoted to the
position of General Merchandise Manager. Ms. Murphy is principally responsible
for the buying, planning and distribution activities associated with procurement
of merchandise. From February 1987 until September 1997, Ms. Murphy was Vice
President of Merchandising for Doncaster and from October 1985 until February
1987 was Merchandiser and National Sales Manager for Caribou Sportswear. From
1981 until 1985, she was Director of Fashion Coordination for Lane Bryant.
Marvin J. Gralnick and Helene B. Gralnick are husband and wife. None of the
other executive officers or directors are related to one another. Executive
officers are elected by and serve at the discretion of the Board of Directors.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table provides information concerning the annual compensation
of each of the named executive officers of the Company, as defined under
applicable Securities and Exchange Commission Rule, for services rendered to the
Company in each of the Company's last three fiscal years.
LONG TERM
ANNUAL COMPENSATION
COMPENSATION(1) AWARDS
----------------------- ------------ ALL
SECURITIES OTHER
UNDERLYING COMPEN-
NAME AND FISCAL YEAR SALARY BONUS($) OPTIONS SATION
PRINCIPAL POSITION ENDED ($) (2) (#) ($)(3)
------------------ ---------------- --------- ----------- ------------ -------
Marvin J. Gralnick,....................... January 30, 1999 339,423 272,080 50,000 6,756
Chairman of the Board, January 31, 1998 267,307 132,000 100,000 4,821
Chief Executive Officer and President February 1, 1997 203,846 56,000 (4) 2,794
Helene B. Gralnick,....................... January 30, 1999 151,961 90,200 10,000 6,459
Senior Vice President -- January 31, 1998 126,923 45,900 25,000 4,382
Design and Concept February 1, 1997 44,231 13,020 (4) 602
Charles J. Kleman,........................ January 30, 1999 235,768 141,600 10,000 6,587
Executive Vice President -- January 31, 1998 209,375 76,275 40,000 4,821
Finance and Chief Financial Officer February 1, 1997 191,106 39,375 30,000 3,396
Scott A. Edmonds,......................... January 30, 1999 186,826 112,200 10,000 6,510
Senior Vice President -- January 31, 1998 166,828 60,750 35,000 4,821
Operations February 1, 1997 152,885 31,500 24,000 3,396
- ---------------
(1) Other Annual Compensation, other than salary and bonuses, was not paid or
did not exceed the minimum amounts required to be reported pursuant to
Securities and Exchange Commission Rules.
(2) Amounts in this column consist of certain bonuses including bonuses earned
under the semi-annual management incentive plan which is keyed to the
Company's performance. Amounts earned with respect to a particular fiscal
year are accrued as expenses in such fiscal year.
(3) This category includes the Company's contributions to the Profit Sharing
Plan/401(k) Plan.
(4) Not applicable. No compensation of this type received.
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OPTION/SAR GRANTS TABLE
The following table shows all options to purchase our common stock granted
to each of our named executive officers in fiscal 1999 and the potential value
of such grants at stock price appreciation rates of 5% and 10%, compounded
annually over the maximum ten-year term of the options. The 5% and 10% rates of
appreciation are required to be disclosed by SEC rules and are not intended to
forecast possible future appreciation, if any, in our stock price.
OPTION GRANTS IN LAST FISCAL YEAR
---------------------------------------------------- POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
---------------------------- ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS EXERCISE APPRECIATION FOR
UNDERLYING GRANTED TO OR BASE OPTION TERM
OPTIONS EMPLOYEES IN PRICE EXPIRATION ---------------------
NAME GRANTED(#)(1) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
---- ------------- ------------ -------- ---------- --------- ---------
Marvin J. Gralnick.............. 50,000 25.5% 9.25 4/13/2008 290,864 737,106
Helene B. Gralnick.............. 10,000 5.1% 9.25 4/13/2008 58,173 147,421
Charles J. Kleman............... 10,000 5.1% 9.25 4/13/2008 58,173 147,421
Scott A. Edmonds................ 10,000 5.1% 9.25 4/13/2008 58,173 147,421
- ---------------
(1) The grants of options above were made in April 1998. All of the options vest
annually at a rate of 33 1/3% on each anniversary date of the grant
beginning on the first anniversary.
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
The following table shows information concerning stock option exercises and
values as of the end of fiscal 1999.
AGGREGATED FISCAL
YEAR-END
OPTION VALUES
----------------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE OPTIONS AT FISCAL YEAR-END(#) AT FISCAL YEAR-END ($)
NAME EXERCISE REALIZED(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(2)
---- ----------- ----------- ----------------------------- ----------------------------
Marvin J. Gralnick....... -- -- 48,333 / 116,667 1,283,324 / 2,879,176
Helene B. Gralnick....... -- -- 23,333 / 26,667 602,074 / 666,676
Charles J. Kleman........ 100,000 1,086,548 169,493 / 46,667 4,180,921 / 1,174,176
Scott A. Edmonds......... 37,000 385,625 11,666 / 41,334 269,899 / 1,036,352
- ---------------
(1) This represents the excess of the fair market value of the Company's Common
Stock as of the date of exercise above the exercise price of the options.
(2) This represents the excess of the fair market value of the Company's Common
Stock of $30.50 per share as of January 29, 1999, above the exercise price
of the options.
EMPLOYMENT AGREEMENTS
Effective February 15, 1995, the Company entered into new employment
agreements with Mr. Gralnick and Ms. Gralnick which each provide for an annual
base salary and certain other benefits. Pursuant to the employment agreements,
the 1995 annualized base salaries of Mr. Gralnick and Ms. Gralnick were $200,000
and $100,000, respectively, subject in each case to annual increases as agreed
upon between the executive and the Board of Directors (currently $350,000 and
$150,000, respectively). Under the terms of the employment agreements, the
Company contracted to employ Mr. Gralnick and Ms. Gralnick for a period which
currently extends through December 31, 1999, and which period, by the terms of
the agreement is automatically extended for additional one-year periods until
the respective employment agreement is terminated by the Company or the
executive.
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Effective April 1, 1993, the Company entered into an employment agreement
with Mr. Kleman which provides for an annual base salary and certain other
benefits. Pursuant to the employment agreement and certain further actions of
the Board of Directors, the 1996 base salary of Mr. Kleman was $150,000 subject
to annual increases thereafter as agreed upon between Mr. Kleman and the Board
of Directors (currently $240,000). Under the terms of the employment agreement,
the Company contracted to employ Mr. Kleman for a period which currently extends
through December 31, 1999, and which period, by the terms of the agreement is
automatically extended for additional one year periods until the employment
agreement is terminated by the Company or Mr. Kleman.
Effective, June 28, 1995, the Company entered into an employment agreement
with Mr. Edmonds which provides for an annual base salary and certain other
benefits. Pursuant to the employment agreement, the initial base salary of Mr.
Edmonds was $125,000 subject to annual increases thereafter as agreed upon
between Mr. Edmonds and the Board of Directors (currently $190,000). Under the
terms of Mr. Edmonds' employment agreement, the Company contracted to employ Mr.
Edmonds for a period which currently extends through December 31, 1999, and
which period, by the terms of the agreement, is automatically extended for
additional one year periods until the employment agreement is terminated by the
Company or Mr. Edmonds.
The employment agreements provide that Messrs. Gralnick, Kleman and Edmonds
and Ms. Gralnick are entitled to certain severance benefits in the event that
their employment is terminated by the Company "without cause" or by such
executive following a "change of control" (both as defined in the employment
agreements). In such cases, the executive would receive his or her salary for
the remainder of the then effective employment term (or, if longer, for 6
months, if the termination is without cause, and for 12 months, if the
termination follows a change in control). Each employment agreement is also
subject to termination in the event of disability, death or voluntary retirement
by the individual or his or her termination for cause. Each employment agreement
provides for a covenant not to compete which is to continue for two years
following any termination.
The Company has entered into substantially identical indemnification
agreements with each of the Company's executive officers and directors in which
the Company has agreed to indemnify each executive officer and director (the
"Indemnified Party") against all losses, costs and expenses that an Indemnified
Party may incur as a result of or arising out of service as an officer or
director of the Company. Among its provisions, each indemnity agreement affords
the Indemnified Party the right to counsel of his or her choosing and obligates
the Company to advance the reasonable fees and expenses of such counsel on
behalf of the Indemnified Party. The indemnification agreements provide there is
to be no indemnification and require the repayment to the Company of any
advanced funds in situations where indemnification is not permitted by
applicable law.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Company's Compensation and Benefits Committee
are John W. Burden, Verna K. Gibson and Ross E. Roeder. Neither Mr. Burden, Ms.
Gibson nor Mr. Roeder has at any time been an officer or employee of the
Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
LEASES OF DISTRIBUTION CENTER AND STORAGE FACILITIES
Prior to the completion and opening of the Company's World Headquarters in
September 1994, the Company utilized certain leased property and facilities as
its distribution center and for storage purposes. The property and facilities
that the Company utilized as its prior distribution center (the "Distribution
Facilities") were leased until August, 1996, from a Florida general partnership
(GS&M#1) in which Marvin J. Gralnick and Barry E. Szumlanski are each equal
partners with Lynn D. Mann. An existing facility that the Company used for
storage was leased until December 1998 from a separate Florida general
partnership (GS&M#2) in
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which Marvin J. Gralnick, Helene B. Gralnick and Barry E. Szumlanski are equal
partners with Lynn D. Mann.
In June 1996, GS&M#1 entered into a separate lease agreement with an
unrelated third party (the "New Lease") to lease the Distribution Facilities and
as a result released the Company from its existing lease with GS&M#1 pursuant to
the terms of a Lease Termination and Settlement Agreement. The terms of the
Lease Termination and Settlement Agreement provide that the Company was to pay
to GS&M#1, (a) until the date January 31, 1998, (the date on which the lease
with the Company was scheduled to expire) the difference between the lease
payments due under the GS&M#1 lease and the New Lease, (b) the real estate
broker commissions payable by GS&M#1 as a result of entering into the New Lease,
(c) all real estate taxes imposed against the Distribution Facilities until
January 31, 1998 and (d) the cost of certain inspections and repairs required
under the New Lease. In addition, under the Lease and Termination Agreement, the
Company has agreed until January 31, 1998 to unconditionally guarantee the
payments due by the unrelated third party tenant under the New Lease. Because of
expense accruals previously reflected, no additional expense is anticipated to
be recognized by the Company. GS&M#1 received no rental payments in fiscal 1999.
Under the GS&M#2 lease the Company continues to be obligated to pay all of
the rent and costs associated with owning and operating the facility, including
utilities, taxes and insurance. The Company continued to pay these same costs
with respect to GS&M#2 through December 1998 even though the facility was no
longer being actively utilized by the Company. The Company utilized the facility
for storage space until December 1998. Although believed to be at fair market
rental at the time the lease was entered into, the rent paid during 1998 under
the GS&M#2 lease was at a rate which was significantly above market rates for
similar property. In fiscal 1999, the Company paid as rent to GS&M#2 (exclusive
of the passed-through costs) approximately $45,293.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
To the Company's knowledge, based solely on a review of the forms, reports
and certificates filed with the Company by the Company's directors and officers
and the holders of more than 10% of the Company's Common Stock, all Section
16(a) filing requirements were complied with by such persons in fiscal 1999
except that two reports on Form 4 were filed late by Ross Roeder to report share
purchases aggregating 3,000 shares.
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SECURITY OWNERSHIP
The following table sets forth, as of April 19, 1999, the number of shares
of the Company's Common Stock beneficially owned by each person known to the
Company as having beneficial ownership of more than 5% of the Company's Common
Stock together with such person's address, each of its directors and nominees to
become a director, each named executive officer as defined under applicable
Securities and Exchange Commission rules and all directors and executive
officers as a group.
AMOUNT AND NATURE
NAME OF BENEFICIAL OWNER OF BENEFICIAL PERCENT
OR NUMBER IN GROUP OWNERSHIP(1) OF CLASS
- ------------------------ ----------------- --------
Marvin J. Gralnick.......................................... 1,588,460(2) 18.58%
c/o Chico's FAS, Inc.
11215 Metro Parkway
Ft. Myers, Florida 33912
Helene B. Gralnick.......................................... 1,588,460(2) 18.58%
c/o Chico's FAS, Inc.
11215 Metro Parkway
Ft. Myers, Florida 33912
Rodin, Ltd.................................................. 1,455,128(2) 17.29%
301 Congress, Suite 1900
Austin, Texas 78701
FMR Corp.................................................... 764,350(3) 9.08%
82 Devonshire Street
Boston, MA 02109
Jeffrey N. Vinik............................................ 644,100(4) 7.65%
260 Franklin Street
Boston, MA 02110
Charles J. Kleman........................................... 203,137(5) 2.36%
Scott A. Edmonds............................................ 25,333(6) *
Verna K. Gibson............................................. 168,000(7) 1.98%
Ross E. Roeder.............................................. 31,000(8) *
John W. Burden.............................................. 45,000(9) *
All Directors and Executive Officers as a Group (7
persons).................................................. 2,060,930(10) 23.21%
- ---------------
* Less than one percent
(1) Beneficial ownership of shares, as determined in accordance with applicable
Securities and Exchange Commission rules, includes shares as to which a
person has or shares voting power and/or investment power. Except as
otherwise indicated, all shares are held of record with sole voting and
investment power.
(2) Marvin J. Gralnick and Helene B. Gralnick are husband and wife. The number
of shares shown for Marvin J. Gralnick and the number of shares shown for
Helene B. Gralnick each represent the aggregate of all shares held by
Rodin, Ltd., a Texas Limited Partnership. A limited liability company
established by Mr. Gralnick and Ms. Gralnick and of which Mr. Gralnick and
Ms. Gralnick are the sole members and managing members, is the sole general
partner of Rodin, Ltd., owning an aggregate of 1% of the partnership
interests. Mr. Gralnick owns limited partnership interests representing
approximately 49.3% of the partnership interests, Ms. Gralnick owns
separate limited partnership interests representing approximately 49.3% of
the partnership interests and the remaining partnership interests are owned
by a series of irrevocable intervivos trusts established by Mr. Gralnick
and Ms. Gralnick for the benefit of their respective children. Also
includes a total of 133,332 shares for Mr. Gralnick and Ms. Gralnick
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which are deemed to be beneficially owned by them by virtue of certain
stock options that are currently exercisable or become exercisable within
60 days.
(3) This information is derived from a Schedule 13G dated February 1, 1999
filed by FMR Corporation ("FMR"). FMR has sole dispositive power with
respect to all of the shares shown and may be deemed to be the beneficial
owner with respect to all of the shares shown. The address for FMR is 82
Devonshire Street, Boston, Massachusetts 02109.
(4) This information is derived from a Schedule 13G dated January 15, 1999
filed jointly by VGH Partners LLC ("VGH"), Vinik Partners, L.P. ("Vinik
Partners"), Vinik Asset Management, L.P. ("Vinik Asset LP"), Vinik Asset
Management, L.L.C. ("Vinik Asset LLC"), Jeffrey N, Vinik ("J. Vinik"),
Michael S. Gordon ("M. Gordon") and Mark D. Hostetter ("M. Hostetter"). J.
Vinik, M. Gordon and M. Hostetter may be deemed the beneficial owners with
respect to all of the shares shown, with shared voting and dispositive
power as to all such shares. Vinik Asset LP and Vinik Asset LLC may be
deemed the beneficial owners with respect to 383,600 of the shares shown,
with shared voting and dispositive power as to such shares. Vinik Partners
and VGH may be deemed the beneficial owners with respect to 260,500 of the
shares shown, with shared voting and dispositive power as to such shares.
The address of VGH, Vinik Partners, Vinik Asset LP, Vinik Asset LLC, J.
Vinik, M. Gordon and M. Hostetter is 260 Franklin Street, Boston,
Massachusetts 02110.
(5) Includes 2,350 shares owned by Mr. Kleman's son, 2,200 shares owned by his
daughter and 643 shares owned by Mr. Kleman's spouse. In addition, includes
196,159 shares deemed to be beneficially owned by Mr. Kleman by virtue of
stock options that are currently exercisable or become exercisable within
60 days and 1,700 shares deemed to be beneficially owned by virtue of stock
options that are currently exercisable or become exercisable within 60 days
by Mr. Kleman's spouse.
(6) Includes 22,333 shares deemed to be beneficially owned by Mr. Edmonds by
virtue of certain stock options that are currently exercisable or become
exercisable within 60 days.
(7) Includes 61,000 shares deemed to be beneficially owned by Ms. Gibson by
virtue of certain stock options that are currently exercisable.
(8) Includes 25,000 shares deemed to be beneficially owned by Mr. Roeder by
virtue of stock options that are currently exercisable.
(9) Includes 25,000 shares deemed to be beneficially owned by Mr. Burden by
virtue of stock options that are currently exercisable.
(10) Pursuant to applicable Securities and Exchange Commission rules, the
1,455,128 shares of Common Stock owned by Rodin, Ltd. and the 133,332
exercisable options which are deemed to be beneficially owned by each of
Marvin J. Gralnick and Helene B. Gralnick, are counted only once for
purposes of this calculation.
STOCKHOLDER PROPOSALS FOR PRESENTATIONS AT THE 2000 ANNUAL MEETING
Pursuant to the General Rules under the Securities Exchange Act of 1934,
proposals of stockholders intended to be presented at the 2000 Annual Meeting of
Stockholders and in the proxy statement for that meeting must be received by
management of the Company at its executive offices on or before December 19,
1999.
The Company's Amended and Restated Articles of Incorporation also require
certain advance notice to the Company of any stockholder proposal and of any
nominations by stockholders of persons to stand for election as directors at a
stockholders' meeting. Notice of stockholder proposals and of director
nominations must be timely given in writing to the Secretary of the Company
prior to the meeting at which the directors are to be elected. To be timely,
notice must be received at the principal executive offices of the Company not
less than 60 days prior to the meeting of stockholders; provided, however, that
in the event that less than 70 days' notice prior to public disclosure of the
date of the meeting is given or made to the stockholders, notice by the
stockholder, in order to be timely, must be so delivered or received not later
than the close of business
24
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on the tenth day following the day on which such notice of the date of the
annual meeting was mailed or public disclosure of the date of the annual meeting
was made, whichever first occurs.
A stockholder's notice with respect to a proposal to be brought before the
annual meeting must set forth in addition to the matters required to be set
forth by the General Rules under the Securities Exchange Act of 1934 (a) a brief
description of the proposal and the reasons for conducting such business at the
annual meeting, (b) the name and address, as they appear on the Company's books,
of the stockholder proposing such business and any other stockholders known by
such stockholder to be supporting such proposal, (c) the class and number of
shares of the Company which are beneficially owned by such stockholder on the
date of such stockholder notice and by any other stockholders known by such
stockholder to be supporting such proposal on the date of such stockholder
notice, and (d) any financial interest of the stockholder in such proposal.
A stockholder's notice with respect to a director nomination must set forth
(1) the name, age, business address and residence address of the person, (2) the
principal occupation or employment of the person, (3) the class and number of
shares of the Company which are beneficially owned by such person, (4) all
information that would be required to be included in a proxy statement
soliciting proxies for the election of the nominee director (including such
person's written consent to serve as a director if so elected). As to the
stockholder providing such notice, such stockholder must set forth (1) the name
and address, as they appear on the Company's books, of the stockholder and (2)
the class and number of shares of the Company which are beneficially owned by
such stockholder on the date of such stockholder notice.
The complete Amended and Restated Articles of Incorporation provisions
governing these requirements are available to any stockholder without charge
upon request from the Secretary of the Company.
By Order of the Board of Directors,
CHARLES J. KLEMAN, Secretary
Dated: April 20, 1999
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[X] PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE CHICO'S FAS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THE
FOR THE ANNUAL MEETING OF STOCKHOLDERS FOLLOWING NOMINEES AND PROPOSALS.
TO BE HELD ON JUNE 8, 1999 WITH- FOR ALL
FOR HOLD EXCEPT
The undersigned, a stockholder of CHICO'S FAS, INC. (the 1. ELECTION OF DIRECTORS of [ ] [ ] [ ]
"Company"), hereby appoints Marvin J. Gralnick, Charles J. Kleman all nominees listed (except
and Scott A. Edmonds, and each of them, attorney and proxy of the as marked to the contrary
undersigned, each with full powers of substitution, for and on below):
behalf of the undersigned, to represent the undersigned at the
Annual Meeting of Stockholders of the Company to be held at South Nominees for Class III Directors:
Seas Resort, Captiva, Florida at 2:00 P.M., local time, on June 8, MARVIN J. GRALNICK AND JOHN W. BURDEN
1999 and any adjournments or postponements thereof (the
"Annual Meeting"), and to vote at the Annual Meeting all the INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
shares of Common Stock of the Company that the undersigned is INDIVIDUAL NOMINEE, MARK "FOR ALL EXCEPT" AND WRITE
entitled to vote at the Annual Meeting, with the same effect as THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
if the undersigned were personally present at the Annual Meeting,
all as described in the Company's Proxy Statement dated April 20, ---------------------------------------------------------
1999 relating to the Annual Meeting, and the undersigned hereby FOR AGAINST ABSTAIN
authorizes and instructs the above named proxies to vote as 2. PROPOSAL TO RATIFY THE APPOINT- [ ] [ ] [ ]
specified to the right. MENT OF ARTHUR ANDERSEN LLP AS
THE COMPANY'S INDEPENDENT CER-
TIFIED PUBLIC ACCOUNTANTS FOR
FISCAL YEAR 2000.
3. PROPOSAL TO APPROVE THE NON- [ ] [ ] [ ]
EMPLOYEE DIRECTORS' STOCK
OPTION PLAN.
4. PROPOSAL TO RATIFY THE AMEND- [ ] [ ] [ ]
MENT OF THE 1993 EMPLOYEE
STOCK PURCHASE PLAN.
5. PROPOSAL TO RATIFY THE AMEND- [ ] [ ] [ ]
MENT OF THE 1993 STOCK OPTION
PLAN.
Please be sure to sign and date Date
this Proxy in the box below. 6. OTHER MATTERS. Unless a line is stricken through this
- ------------------------------------------------------------------- sentence, the proxies herein may in their discretion
| | vote the shares represented by this proxy upon such
| | other matters as may properly come before the Annual
| Stockholder sign above Co-holder (if any) sign above | Meeting.
- ---- -------- ----
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
CHICO'S FAS, INC.
The shares represented by this Proxy will be voted in the manner
directed herein only if this Proxy is properly executed and timely returned. IF
THE UNDERSIGNED DOES NOT SPECIFY A CHOICE, THE SHARES WILL BE VOTED FOR THE
NOMINEES FOR DIRECTOR LISTED HEREON, FOR THE PROPOSAL TO RATIFY THE APPOINTMENT
OF THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS, FOR THE PROPOSAL TO APPROVE
THE NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN, FOR THE PROPOSAL TO RATIFY THE
AMENDMENT OF THE 1993 EMPLOYEE STOCK PURCHASE PLAN, FOR THE PROPOSAL TO RATIFY
THE AMENDMENT OF THE 1993 STOCK OPTION PLAN AND IN THE DISCRETION OF THE
PROXIES FOR OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
The undersigned acknowledges receipt of (1) the Company's 1999 Annual
Report to Stockholders and (2) the Company's Notice of Annual Meeting and Proxy
Statement dated April 20, 1999 relating to the Annual Meeting. The undersigned
does hereby revoke any proxy previously given with respect to the shares
represented by this Proxy.
NOTE: Your signature should appear as your name appears hereon. As to
shares held in joint names, each joint owner should sign. If the signer is a
corporation, please sign full corporate name by a duly authorized officer. If a
partnership, please sign in partnership name by authorized person. If signing
as attorney, executor, administrator, trustee, guardian, or in other
representative capacity, please give full title as such.
PLEASE MARK, SIGN AND DATE THIS PROXY CARD
AND PROMPTLY RETURN IT USING THE ENCLOSED ENVELOPE.