<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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 Section240.14a-11(c) or
Section240.14a-12
SAKS HOLDINGS, 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:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
Saks Holdings, Inc.
12 East 49th Street
New York, New York 10017
[LOGO]
<TABLE>
<S> <C>
Philip B. Miller
Chairman and
Chief Executive Officer
</TABLE>
Dear Stockholder:
We are pleased to invite you to the 1998 Annual Meeting of Stockholders for
Saks Holdings, Inc. This year's meeting will be held at 10:00 a.m. on June 15,
1998 at the Chase Manhattan Bank, 270 Park Avenue, 11th Floor, New York, New
York. We look forward to your participation either in person or by proxy.
The Notice of Meeting, the Proxy Statement and the proxy card from the Board
of Directors are enclosed and provide further information concerning the agenda
for the Annual Meeting, which includes the annual election of directors and a
proposal to ratify the appointment of our independent auditing firm. The Board
of Directors recommends that you vote "FOR" each of these items. Please refer to
the enclosed Proxy Statement for detailed information on each of these
proposals.
It is important that your shares be represented at the Annual Meeting,
whether or not you plan to attend. Accordingly, you are requested to complete,
date and sign the enclosed proxy card and return it in the enclosed envelope,
which requires no postage if mailed in the United States. Returning the proxy
card by mail does not affect your ability to attend the Annual Meeting in
person.
We look forward to seeing you at the Annual Meeting on June 15, 1998.
Sincerely yours,
/s/ Philip B. Miller
Philip B. Miller
<PAGE>
SAKS HOLDINGS, INC.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 15, 1998
10:00 A.M., EASTERN STANDARD TIME
------------------------
To the Stockholders of
Saks Holdings, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders of Saks
Holdings, Inc. (the "Company") will be held at the Chase Manhattan Bank, 270
Park Avenue, 11th Floor, New York, New York at 10:00 a.m., Eastern Standard
time, on June 15, 1998 for the following purposes:
1. To elect eight directors of the Company to serve until the next annual
meeting and until their successors have been duly elected and qualified;
2. To ratify the selection of Coopers & Lybrand L.L.P. as independent
public accountants for the Company for the fiscal year ending January 30, 1999;
and
3. To transact such other business as may properly come before the meeting
and any adjournment thereof.
The Board of Directors has fixed the close of business on April 20, 1998 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting or any adjournment thereof. A list of stockholders
of the Company as of the close of business on April 20, 1998 will be available
for inspection by stockholders during normal business hours from June 4, 1998
through June 14, 1998 at the Company's executive offices at 12 East 49th Street,
New York, New York 10017.
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN
PERSON. WHETHER OR NOT YOU EXPECT TO ATTEND IN PERSON, IT IS REQUESTED THAT YOU
PROMPTLY FILL IN, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD. IF YOU LATER
DESIRE TO REVOKE YOUR PROXY, YOU MAY DO SO AT ANY TIME BEFORE IT IS EXERCISED.
By order of the Board of Directors
/s/ Joan F. Krey
Joan F. Krey
Corporate Secretary
May 1, 1998
<PAGE>
SAKS HOLDINGS, INC.
12 EAST 49TH STREET
NEW YORK, NEW YORK 10017
---------------------
PROXY STATEMENT
---------------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Saks Holdings, Inc. (the "Company") for use
at the annual meeting of stockholders to be held at 10:00 a.m., Eastern Standard
time, on June 15, 1998, at the Chase Manhattan Bank, 270 Park Avenue, 11th
Floor, New York, New York, and at any adjournment thereof (the "Meeting"). The
Company is the holding company for Saks & Company, a wholly-owned subsidiary
that does business as Saks Fifth Avenue ("Saks").
Written communications to the Company should be sent to the Company's office
at 12 East 49th Street, New York, New York 10017. The Company can be reached by
telephone at (212) 940-4048. This Proxy Statement and a proxy card, together
with a copy of the Company's 1997 Annual Report, are first being mailed on or
about May 1, 1998, to persons who were holders of record of the Company's Common
Stock, par value $0.01 per share (the "Common Stock"), at the close of business
on April 20, 1998 (the "Record Date").
MATTERS TO BE CONSIDERED AT THE MEETING
At the Meeting, the holders of shares of Common Stock as of the Record Date
will be asked to consider and vote on the proposals described in this Proxy
Statement and on any other matter properly brought before the Meeting. With
respect to any matter to come before the Meeting, holders of record of Common
Stock will be entitled to one vote for each share of Common Stock held.
The following is a brief summary of the proposals to be introduced at the
Meeting by the Company. The summary is not intended to be a complete statement
of all material features of the proposals and is qualified in its entirety by
the more detailed information contained elsewhere in this Proxy Statement.
PROPOSAL 1
Proposal 1 concerns the election of a board of eight directors. All of the
Company's nominees for election to the Board of Directors are currently serving
as members of the Board.
PROPOSAL 2
Proposal 2 concerns ratification of Coopers & Lybrand L.L.P. as the
Company's independent public accountants.
VOTING AT THE MEETING
The Board of Directors has fixed April 20, 1998 as the Record Date for the
Meeting, and only holders of record of the Common Stock at the close of business
on the Record Date are entitled to notice of, and to vote at, the Meeting. On
the Record Date, there were outstanding and entitled to vote approximately
63,721,183 shares of the Common Stock.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of the Common Stock is necessary to constitute a quorum at
the Meeting. The election of the Board of Directors requires the affirmative
vote of a plurality of the shares of the Common Stock present and voting at the
Meeting. "Plurality" means that the individuals who receive the largest number
of votes cast "FOR" are elected as directors, up to the maximum number of
directors to be chosen at the Meeting.
<PAGE>
Ratification of the appointment of the Company's independent public
accountants and approval of any other business properly brought before the
Meeting shall be decided by the affirmative vote of the holders of a majority of
the shares of Common Stock present, in person or represented by proxy, at the
Meeting and entitled to vote thereon, unless a higher vote is required for any
such other matter under applicable state law or the Company's Amended and
Restated Certificate of Incorporation or Bylaws.
In accordance with Delaware law, abstentions and shares held of record by a
broker or its nominee ("Broker Shares") that are voted on any particular matter
are included for purposes of determining the number of votes present on such
matter. Broker Shares that are not voted on any particular matter at the Meeting
will not be treated as entitled to vote on such matter.
PROXIES
If the enclosed proxy is properly executed and returned in time for the
Meeting, the shares of stock represented thereby will be voted in accordance
with the instructions given thereon. If no instructions are given, such shares
will be voted "FOR" each of the Company's nominees as director and "FOR" the
ratification of Coopers & Lybrand L.L.P. as the Company's independent public
accountants. Proxies will extend to, and be voted at, any adjournment of the
Meeting.
The Board of Directors does not intend to bring before the Meeting any
business other than as set forth in this Proxy Statement and has not been
informed under the advance notice requirements of the Company's Bylaws that any
other business is to be presented at the Meeting. However, should any other
matter properly come before the Meeting, it is the intention of the persons
named as proxies in the accompanying proxy or their duly authorized and
constituted substitutes to vote or act thereon in accordance with their best
judgment.
Any stockholder who has executed and returned a proxy and who for any reason
desires to revoke such proxy may do so at any time before the proxy is exercised
(i) by delivering written notice prior to the Meeting to the Secretary of the
Company at the above address, (ii) by voting the shares represented by such
proxy in person at the Meeting, or (iii) by giving a later dated proxy at any
time before the voting. Attendance at the Meeting will not, by itself, revoke a
proxy.
2
<PAGE>
PROPOSAL 1. ELECTION OF DIRECTORS
The eight individuals identified in the table below (the "Nominees") are the
Company's nominees for election as directors at the Meeting. Directors are
elected for terms of one year or until the next annual meeting of stockholders,
and serve until resignation, or succession by election or appointment. All of
the Nominees have consented to being named as such in this Proxy Statement and
have agreed to serve if elected. If any Nominee should become unavailable for
election at the time of the Meeting, the persons voting the proxies solicited
hereby may in their discretion vote for a substitute nominee or the Board of
Directors may choose to reduce the number of directors. The Board of Directors
has no reason to believe that any Nominee will be unavailable to serve. All
Nominees are currently serving on the Company's Board of Directors.
The following table sets forth each Nominee's name, age as of March 31, 1998
and position. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
ELECTION OF EACH OF THE NOMINEES NAMED BELOW.
<TABLE>
<CAPTION>
NAME AGE POSITION
- -------------------------------------------------- ----- -----------------------------------------------------------------
<S> <C> <C>
Philip B. Miller.................................. 59 Chairman, Chief Executive Officer and Director
Brian E. Kendrick................................. 44 Vice Chairman, Chief Operating Officer and Director
E. Garrett Bewkes III............................. 47 Director
Jon P. Hedley..................................... 37 Director
Charles J. Philippin.............................. 47 Director
Brian Ruder....................................... 43 Director
Stephen I. Sadove................................. 46 Director
Savio W. Tung..................................... 46 Director
</TABLE>
BACKGROUND OF NOMINEES
The following is a brief account of the business experience of each of the
Nominees. There are no family relationships among the Nominees or special
agreements pursuant to which such persons have been nominated as directors of
the Company.
PHILIP B. MILLER is Chairman and Chief Executive Officer of both the Company
and Saks. Mr. Miller was named to his current positions with the Company in
March 1996 and with Saks in June 1993. Mr. Miller joined Saks in August 1990 as
Vice Chairman and became Chief Operating Officer of Saks in 1992. Mr. Miller
became Vice Chairman and a director of the Company in August 1990 and a Vice
President of the Company in January 1991. Mr. Miller formerly was Chairman and
Chief Executive Officer of Marshall Field's, joining that company in 1983 from
Neiman Marcus, where he had been President since 1977.
BRIAN E. KENDRICK is Vice Chairman and Chief Operating Officer of both the
Company and Saks. Mr. Kendrick became Vice Chairman of the Company in March
1996, Vice Chairman of Saks in November 1994 and Chief Operating Officer of both
the Company and Saks in August 1996. He joined Saks as Senior Vice President and
Chief Financial Officer in April 1991 and became a director of the Company in
February 1994. From 1981 to 1991, Mr. Kendrick was the Chief Financial Officer
of Maison Blanche/Goudchaux, Inc. in Baton Rouge, Louisiana. In 1987 and 1988 he
took a leave of absence to become the Chief Administrative Officer for the State
of Louisiana.
E. GARRETT BEWKES III became a director of Saks and the Company in June
1994. He is co-founder and Managing Principal of GarMark Advisors, LLC. He was
an executive of Investcorp S.A. ("Investcorp"), its predecessor or one or more
of its wholly-owned subsidiaries from March 1994 to November 1995. Prior to
joining Investcorp, Mr. Bewkes was Vice Chairman and Co-head of the Investment
Banking Department at Bear, Stearns & Co. Inc., where he also held the position
of Senior Managing Director. Mr. Bewkes is a director of Headway Corporate
Resources, Inc.
3
<PAGE>
JON P. HEDLEY became a director of Saks and the Company in October 1995. Mr.
Hedley served as Secretary and Treasurer of the Company from September 1992 to
August 1996. He has been an executive of Investcorp, its predecessor or one or
more of its wholly-owned subsidiaries since April 1990. Mr. Hedley is a director
of CSK Auto Corporation and Simmons Company.
CHARLES J. PHILIPPIN became a director of Saks and the Company in January
1995. He has been an executive of Investcorp, its predecessor or one or more of
its wholly-owned subsidiaries since October 1994. Prior to joining Investcorp,
Mr. Philippin was a partner with Coopers & Lybrand L.L.P. Mr. Philippin is a
director of CSK Auto Corporation, Falcon Building Products, Inc., Simmons
Company, Star Markets, Inc. and The William Carter Company.
BRIAN RUDER became a director of the Company in August 1996. Since March
1997, Mr. Ruder has served as Executive Vice President, Citibank, N.A. From 1988
until he assumed his current responsibilities, Mr. Ruder held various executive
positions at H.J. Heinz Company or one of its operating divisions, most recently
as President, Heinz USA Retail Products.
STEPHEN I. SADOVE became a director of the Company in August 1996. Since
December 1997, Mr. Sadove has served as President of Bristol-Myers Squibb,
Worldwide Beauty Care and Nutritionals. Since 1991, Mr. Sadove has held various
executive positions with Bristol-Myers Squibb, including President of Worldwide,
Clairol, Inc.
SAVIO W. TUNG became a director of the Company in April 1990. He has been an
executive of Investcorp, its predecessor or one or more of its wholly-owned
subsidiaries since September 1984. Mr. Tung is a director of CSK Auto
Corporation, Simmons Company and Star Markets, Inc.
COMMITTEES AND BOARD MEETINGS
During fiscal 1997, there were 5 meetings of the Board of Directors. During
1997, each incumbent director attended 75% or more of the aggregate of the
meetings of the Board and of the Board committees upon which he served.
The Board has two standing committees, an Audit Committee and a Compensation
and Human Resources Committee. The functions of the two committees are described
below.
AUDIT COMMITTEE. The Audit Committee meets with management, the Company's
internal auditors and the Company's independent accountants to consider the
adequacy of the Company's internal controls and financial reporting. The Audit
Committee recommends the Company's independent accountants to the Board;
discusses with the independent accountants their audit procedures, including the
proposed scope and timing of the audit, the audit results and accompanying
management letters; reviews the auditor's fees and services; and in general
endeavors to ensure the independence of the auditors and accountants. The Audit
Committee held 8 meetings during 1997. The current members of the Audit
Committee are Messrs. Bewkes, who serves as Chairman of the Committee, Ruder and
Sadove.
COMPENSATION AND HUMAN RESOURCES COMMITTEE. The Compensation and Human
Resources Committee reviews and approves the compensation and employee benefits
of the executive officers of the Company, particularly those of the Chief
Executive Officer and Chief Operating Officer, and reviews in general the
policies relating to the compensation of senior management and other employees
of Saks. In addition, the Compensation and Human Resources Committee administers
the Company's Senior Management Stock Incentive Plan (the "Old Incentive Plan"),
the 1996 Management Stock Incentive Plan (the "New Incentive Plan") and the
Directors Plan. The Compensation and Human Resources Committee held 5 meetings
in fiscal 1997 and on other occasions acted by written consent. The current
members of the Compensation and Human Resources Committee are Messrs. Sadove,
who serves as Chairman of the Committee, Bewkes, Hedley, Philippin, Ruder and
Tung.
DIRECTORS' COMPENSATION
Directors who were employees of the Company or executives of Investcorp
received no separate compensation for serving as directors in fiscal 1997. Other
directors received an annual retainer of $22,000,
4
<PAGE>
payments of $1,500 per meeting attended in person and $500 per telephonic
meeting and reimbursement of out-of-pocket expenses incurred in attending
meetings of the Board of Directors and any committees of the Board on which they
serve. For fiscal 1997, Messrs. Bewkes, Sadove and Ruder each were granted a
stock option to acquire 1,000 shares of Common Stock pursuant to the Directors'
Stock Plan at an exercise price equal to the price of the Common Stock on the
date of the 1997 annual meeting of stockholders, which options will fully vest
on the date of the Meeting.
EXECUTIVE OFFICERS
The following table sets forth the name, age as of March 31, 1998 and
position of each executive officer of the Company. These executive officers in
addition hold the same positions with Saks.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------------------------- --- -----------------------------------------------------
<S> <C> <C>
Philip B. Miller..................................... 59 Chairman, Chief Executive Officer and Director
Brian E. Kendrick.................................... 44 Vice Chairman, Chief Operating Officer and Director
Jeanne B. Daniel..................................... 42 Executive Vice President-Merchandising
Christina Johnson.................................... 47 Executive Vice President-Stores
Sheri Wilson-Gray.................................... 47 Executive Vice President-Marketing
Mark E. Hood......................................... 45 Senior Vice President, Chief Financial Officer and
Chief Accounting Officer
Joan F. Krey......................................... 52 Senior Vice President and Corporate Secretary
</TABLE>
BACKGROUND OF EXECUTIVE OFFICERS
The following is a brief account of the business experience of each of the
executive officers of the Company other than Messrs. Miller and Kendrick, whose
background is described above under "Election of Directors." There are no family
relationships or special understandings pursuant to which such persons have been
elected as officers of the Company.
JEANNE B. DANIEL became Executive Vice President-Merchandising of Saks in
February 1998 and of the Company in April 1998. From 1986 until she assumed her
current responsibilities, Ms. Daniel held various positions at Tiffany & Co.,
most recently as Executive Vice President, Merchandising and Marketing, a
position she assumed in January 1997.
CHRISTINA JOHNSON became Executive Vice President-Stores of Saks and the
Company in August 1996. From 1992 until July 1996, Ms. Johnson served Saks as
Senior Vice President and Regional Director of Stores. Ms. Johnson joined Saks
in 1991 from Marshall Field's where she was Senior Vice President and General
Merchandise Manager.
SHERI WILSON-GRAY became Executive Vice President-Marketing of Saks in
October 1997 and of the Company in April 1998. From April 1994 to September
1997, Ms. Wilson-Gray served as Senior Vice President of Saks. Ms. Wilson-Gray
joined Saks in November 1991 as Vice President, Marketing.
MARK E. HOOD became Senior Vice President and Chief Accounting Officer of
Saks and the Company in August 1996 and became Chief Financial Officer of Saks
and the Company in April 1998. Mr. Hood joined Saks in June 1995 as Vice
President, Finance. From 1991 to June 1995, Mr. Hood served as Vice President
and controller for Foley's Department Stores, a division of the May Department
Stores Company.
JOAN F. KREY became Senior Vice President of the Company and Saks in May
1997. Ms. Krey has served as Corporate Secretary of the Company since August
1996 and has served as General Counsel, Vice President and Corporate Secretary
of Saks since August 1985.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information regarding the compensation of the
Company's Chief Executive Officer and the five other most highly compensated
executive officers of the Company who served as executive officers at the end of
fiscal 1997 or who served as an executive officer of the Company during fiscal
1997 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
-------------
ANNUAL COMPENSATION(2) SHARES
----------------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION
- ----------------------------------------------------- --------- ------------ ---------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Philip B. Miller..................................... 1997 $ 1,200,000 $ 0 161,250 $ 61,614(3)
Chairman and Chief Executive Officer 1996 1,200,000 600,000 634,210 61,710
1995 1,100,000 360,000 0 59,567
Brian E. Kendrick.................................... 1997 775,000 0 86,250 7,842(4)
Vice Chairman and Chief Operating Officer 1996 750,000 375,000 405,025 8,268
1995 666,667 225,000 0 8,347
Rose Marie Bravo(5).................................. 1997 568,750 0 86,250 7,842(6)
President 1996 750,000 375,000 402,070 51,219
1995 666,667 225,000 0 18,515
Owen E. Dorsey(7).................................... 1997 385,000 0 19,125 7,842(8)
Executive Vice President 1996 378,750 60,000 79,805 7,211
1995 357,500 40,000 0 113,009
Richard F. Zannino(9)................................ 1997 379,167 0 25,500 7,842(10)
Executive Vice President, Chief Financial Officer 1996 330,833 150,000 117,470 6,468
and Treasurer 1995 290,000 90,000 39,110 6,845
Christina Johnson.................................... 1997 364,583 (11) 19,125 7,842(12)
Executive Vice President 1996 350,000 115,000
</TABLE>
- ------------------------
(1) The amounts indicated reflect compensation paid by Saks.
(2) Perquisites did not exceed $50,000 or 10% of the total salary and bonus for
any of the Named Executive Officers.
(3) Reflects (i) the value of insurance premiums paid by Saks in the amounts of
$5,592, $3,359 and $10,414 with respect to supplementary medical benefits,
long-term disability benefits and term life insurance, respectively, for the
benefit of Mr. Miller, (ii) $2,250 of matching benefits paid by Saks under
the Retirement Savings Plan and (iii) $40,000 paid by Saks for personal
expenses allowance.
(4) Reflects (i) the value of insurance premiums paid by Saks in the amount of
$5,592 with respect to supplementary medical benefits and term life
insurance, respectively, for the benefit of Mr. Kendrick and (ii) $2,250 of
matching benefits paid by Saks under the Retirement Savings Plan.
(5) Ms. Bravo served as President of the Company and Saks through October 1997.
(6) Reflects (i) the value of insurance premiums paid by Saks in the amount of
$5,592 with respect to supplementary medical benefits for the benefit of Ms.
Bravo, (ii) $2,250 of matching benefits paid by Saks under the Retirement
Savings Plan and (iii) $4,722 paid by Saks for business related clothing
discounts.
6
<PAGE>
(7) Mr. Dorsey served as Executive Vice President of the Company and Saks
through February 1998.
(8) Reflects (i) the value of insurance premiums paid by Saks in the amount of
$5,592 with respect to supplementary medical benefits for the benefit of Mr.
Dorsey and (ii) $2,250 of matching benefits paid by Saks under the
Retirement Savings Plan.
(9) Mr. Zannino served as Executive Vice President and Chief Financial Officer
of the Company and Saks and Treasurer of the Company through April 1998.
(10) Reflects (i) the value of insurance premiums paid by Saks in the amount of
$5,592 with respect to supplementary medical benefits for the benefit of Mr.
Zannino and (ii) $2,250 of matching benefits paid by Saks under the
Retirement Savings Plan
(11) The fiscal year 1997 bonus for Ms. Johnson, as with certain other officers
of the Company, has not been finalized.
(12) Reflects (i) the value of insurance premiums paid by Saks in the amount of
$5,592 with respect to supplementary medical benefits for the benefit of Ms.
Johnson and (ii) $2,250 of matching benefits paid by Saks under the
Retirement Savings Plan.
The following table sets forth information regarding grants of stock options
by the Company during the fiscal year ended January 31, 1998 to the Named
Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
POTENTIAL
REALIZED
VALUE AT
ASSUMED
ANNUAL
RATES OF
NUMBER OF % OF TOTAL STOCK
SECURITIES OPTIONS MARKET PRICE
UNDERLYING GRANTED TO PRICE ON APPRECIATION(2)
OPTIONS EMPLOYEES IN EXERCISE DATE OF EXPIRATION ----------
NAME GRANTED(1) FISCAL YEAR PRICE GRANT DATE 5%
- ------------------------------------- ---------- ------------ -------- -------- ---------- ----------
Philip B. Miller..................... 107,500 10% $28.00 $24.625 5/28/07 $1,304,916
53,750 5% $40.00 $24.625 5/28/07 $ 7,458
Brian E. Kendrick.................... 57,500 5% $28.00 $24.625 5/28/07 $ 697,978
28,750 3% $40.00 $24.625 5/28/07 $ 3,989
Rose Marie Bravo..................... 57,500 5% $28.00 $24.625 5/28/07 $ 697,978
28,750 3% $40.00 $24.625 5/28/07 $ 3,989
Owen E. Dorsey....................... 12,750 1% $28.00 $24.625 5/28/07 $ 154,769
6,375 1% $40.00 $24.625 5/28/07 $ 885
Richard F. Zannino................... 17,000 2% $28.00 $24.625 5/28/07 $ 206,359
8,500 1% $40.00 $24.625 5/28/07 $ 2,359
Christina Johnson.................... 12,750 1% $28.00 $24.625 5/28/07 $ 154,769
6,375 1% $40.00 $24.625 5/28/07 $ 885
<CAPTION>
<S> <C>
NAME 10%
- ------------------------------------- -----------
Philip B. Miller..................... $ 3,846,216
$ 1,278,108
Brian E. Kendrick.................... $ 2,057,278
$ 683,639
Rose Marie Bravo..................... $ 2,057,278
$ 683,639
Owen E. Dorsey....................... $ 456,179
$ 151,589
Richard F. Zannino................... $ 608,239
$ 202,119
Christina Johnson.................... $ 456,179
$ 151,589
</TABLE>
- ------------------------
(1) The option agreements provide that options will vest to the extent of
one-quarter of the underlying securities on May 28, 1998, one-quarter on the
first anniversary thereof, one-quarter on the second anniversary thereof,
and one-quarter on the third anniversary thereof.
(2) These amounts are based on compounded annual rates of stock price
appreciation of 5% and 10% over the ten-year term of the options, are
mandated by the rules of the Securities and Exchange Commission and are not
indicative of expected stock price performance. Actual gains, if any, on
stock option exercises are dependent on future performance of the Common
Stock, overall market conditions, as well as the option holders' continued
employment throughout the vesting period. The amounts reflected in this
table may not necessarily be achieved or may be exceeded. The indicated
amounts are net of the option exercise price but before taxes that may be
payable upon exercise.
7
<PAGE>
The following table provides information regarding the exercise of options
during the fiscal year ended January 31, 1998, and the number and value of
unexercised options held at January 31, 1998, by the Named Executive Officers.
AGGREGATE OPTION EXERCISES IN FISCAL YEAR 1997
AND OPTION VALUES AT JANUARY 31, 1998
<TABLE>
<CAPTION>
SHARES NUMBER OF SECURITIES VALUE OF UNEXERCISED
ACQUIRED UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ON VALUE OPTIONS AT FY-END AT FY-END(1)
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------- --------- ------------ ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Philip B. Miller........................ -- -- 422,807 372,653 $ 1,816,581 $ 908,284
Brian E. Kendrick....................... -- -- 270,016 221,259 1,256,775 628,388
Rose Marie Bravo........................ 130,000 $ 885,625 -- -- -- --
Owen E. Dorsey.......................... 13,301 145,734 26,601 45,727 99,242 99,242
Richard F. Zannino...................... 25,000 503,125 53,312 64,658 199,199 180,856
Christina Johnson....................... 21,067 315,873 23,900 45,858 81,686 81,679
</TABLE>
- ------------------------
(1) Calculated on the basis of $22.50 per share, the fair market value of the
Common Stock at January 30, 1998, less the exercise price payable for such
shares.
PENSION AND SUPPLEMENTARY RETIREMENT PLANS
Saks maintains a pension plan (the "Pension Plan"), which covers
substantially all of the employees of Saks and its affiliates. Saks also
maintains an unfunded supplemental pension plan (the "Supplemental Plan"), which
covers certain senior executives of Saks. The following table sets forth
estimated annual benefits payable upon retirement with regard to the
Supplemental Plan, prior to any offset reductions.
<TABLE>
<CAPTION>
YEARS OF SERVICE(1)
<S> <C> <C> <C> <C> <C>
REMUNERATION(2) 15 20 25 30 35
- --------------- ---------- ---------- ---------- ---------- ----------
$ 250,000 $ 75,000 $ 100,000 $ 125,000 $ 125,000 $ 125,000
300,000 90,000 120,000 150,000 150,000 150,000
400,000 130,000 160,000 200,000 200,000 200,000
500,000 150,000 200,000 250,000 250,000 250,000
750,000 225,000 300,000 375,000 375,000 375,000
1,000,000 300,000 400,000 500,000 500,000 500,000
1,320,000 396,000 528,000 660,000 660,000 660,000
</TABLE>
- ------------------------
(1) At the end of the 1997 fiscal year, Mr. Miller had approximately 21 credited
years of service (13 of which were granted to him pursuant to his employment
agreement), Mr. Kendrick had approximately seven credited years of service,
Mr. Zannino had five years of credited service, Mr. Dorsey had four years of
credited service and Ms. Johnson had seven years of credited service. At the
time of her termination of employment, Ms. Bravo had approximately five
years of credited service.
(2) The compensation covered by the Supplemental Plan includes base salary only,
and not bonus or other amounts. For each of the Named Officers, the current
compensation covered by the Supplemental Plan does not differ by more than
10% from the amount listed in the "Salary" column of the Summary
Compensation table. The amount of the supplemental pension to which a
participant is entitled is an annual amount computed in the form of single
life annuity equal to 2% of his or her Average Final Earnings multiplied by
his or her years of credited service up to a maximum of 25 years, reduced by
any amounts received due to the Pension Plan, primary Social Security
benefits or matching amounts under the Retirement Savings Plan. "Average
Final Earnings" for purposes of the Supplemental Plan is the average rate of
the participant's salary for the last 36 calendar months of his or her
credited service.
8
<PAGE>
Benefits under the Pension Plan are based primarily on years of service and
the employees' compensation, subject to limitations under the Internal Revenue
Code of 1986, as amended (the "Code"). The compensation covered by the Pension
Plan includes base salary only, and not bonus or other amounts. Saks' policy is
to fund the plan to satisfy the requirements of the Employee Retirement Income
Security Act of 1974 ("ERISA"). Generally, an employee is entitled upon
retirement to annual payments for each year of service in the amount of 1% of
his or her covered compensation received for that year of service. The estimated
benefits payable upon retirement at normal retirement age for each Named
Executive Officer as of January 31, 1998 is $12,969 (Mr. Miller), $12,969 (Mr.
Kendrick), $8,458 (Ms. Bravo), $6,100 (Mr. Dorsey), $8,010 (Mr. Zannino) and
$10,856 (Ms. Johnson).
The Supplemental Plan covers the Chairman, Vice Chairman, Executive Vice
Presidents and Senior Vice Presidents of Saks (the "Covered Employees") and
those who were Vice Presidents and General Managers prior to July 1990. The
Supplemental Plan is maintained primarily for the purpose of providing deferred
compensation for a select group of management and highly compensated employees
in accordance with the provisions of ERISA. The Covered Employees have a
nonforfeitable right to receive a supplemental pension upon five years of
service in the covered position. Generally, the amount of the supplemental
pension for a Covered Employee is an annual amount computed in the form of a
single life annuity equal to 2% of the Final Average Earnings (as defined in the
Supplemental Plan) multiplied by his or her years of service up to a maximum of
25 years, subject to offset reduction for Social Security benefits and for
amounts received from Saks or its affiliates under any other qualified, formal
or informal plan, including the Pension Plan.
EMPLOYMENT AGREEMENTS
Saks has employment agreements with each of Mr. Miller, Mr. Kendrick, and
Mr. Dorsey. Each agreement requires the executive officer to devote his or her
full time and best efforts to Saks during the term of the agreement.
PHILIP B. MILLER. The employment agreement with Mr. Miller commenced in
March 1996 and continues until terminated by either party as provided therein.
The agreement provides for an annual salary of $1.2 million plus increases based
on the percentage increase, if any, in the Consumer Price Index, or by a greater
amount, at the discretion of the Board of Directors of Saks. In addition, the
agreement provides for the payment of an annual bonus as determined by the Board
of Directors of Saks.
If Saks terminates Mr. Miller's employment for any reason other than for
death, disability, retirement or cause, or if Mr. Miller terminates his
employment with Saks due to a breach by Saks of any of its obligations to Mr.
Miller which breach is not cured within 30 days, Mr. Miller shall be entitled to
receive an amount equal to three times his base salary then in effect and
Standard Termination Amounts, as defined below. Mr. Miller is entitled to
receive an identical amount if he voluntarily terminates his employment at any
time when he is not a member of the Boards of Directors of both the Company and
Saks. If Saks terminates Mr. Miller for "cause" (as defined in the agreement) or
if Mr. Miller voluntarily terminates his employment except as described in the
preceding sentences, Mr. Miller is entitled to receive Standard Termination
Amounts. "Standard Termination Amounts" consist of pro-rated earned but unpaid
salary, bonus, deferred compensation, certain expense allowances and unpaid or
unreimbursed benefits under applicable benefit plans and programs.
OTHER NAMED EXECUTIVE OFFICERS. Saks' employment agreements with Mr.
Kendrick, and Mr. Dorsey each commenced in March 1996 and continue until
terminated, The agreements provide for annual salaries of $750,000 and $360,000,
respectively and a bonus payment at the discretion of the Board of Directors of
Saks. The agreements further provide for annual performance and salary reviews,
and for participation in all other bonus and benefit plans applicable to other
similarly situated officers.
If Saks terminates Mr. Kendrick's employment for any reason other than for
death, disability, retirement or cause, or if Mr. Kendrick terminates his
employment within three months of either Saks'
9
<PAGE>
assignment of duties inconsistent with his status as a senior executive officer
of Saks or a substantial adverse alteration in the nature or status of his
responsibilities, Mr. Kendrick is entitled to receive an amount equal to two
times his base salary then in effect and Standard Termination Amounts. If Saks
terminates Mr. Dorsey's employment for any reason other than for death,
disability, retirement or cause, or Mr. Dorsey resigns after a material change
in his duties, Mr. Dorsey is entitled to receive an amount in cash equal to his
base salary then in effect, Standard Termination Amounts and benefits for one
year following termination. If Saks terminates the employment of Mr. Kendrick or
Mr. Dorsey for "cause" (as defined in each agreement) or if such officer
voluntary terminates his employment other than under circumstances described
earlier in this paragraph, such officer shall be entitled to receive Standard
Termination Amounts.
In March 1996, Saks had entered into an employment agreement with Ms. Bravo
with terms substantially identical to those of the employment agreement with Mr.
Kendrick, as described above. The agreement provided for an annual salary of
$750,000. Pursuant to such agreement, Ms. Bravo was paid Standard Termination
Amounts (pro-rated earned but unpaid salary bonus, deferred compensation,
certain expense allowances and unpaid or unreimbursed benefits under applicable
benefit plans and programs) in connection with her termination of employment
with Saks.
From time to time, Saks has extended loans to certain officers and
directors. In March 1996, Mr. Kendrick executed a note in favor of Saks in the
principal amount of $250,000, the proceeds of which were used to refinance an
earlier note extended to cover relocation costs. The note matures in March 1999,
bears interest at an annual rate of 8% and is secured by a pledge of Common
Stock. At Saks' option, the principal of, and accrued interest on the note
becomes immediately due upon the occurrence of certain events, including the
termination of Mr. Kendrick's employment by Saks for any reason.
10
<PAGE>
REPORT OF THE COMPENSATION AND HUMAN RESOURCES COMMITTEE
ON EXECUTIVE COMPENSATION
OPERATION OF THE COMPENSATION AND HUMAN RESOURCES COMMITTEE
The Compensation and Human Resources Committee of the Board of Directors of
the Company (the "Committee") consists of Messrs. Sadove, who serves as Chairman
of the Committee, Bewkes, Hedley, Philippin, Ruder and Tung, each of whom is a
non-employee director of the Company. The overall compensation policy which the
Committee pursues for the Company and Saks is to provide a reward structure that
will motivate the Company's executives to assist in achieving the Company's
strategic and financial goals, retain and attract competent personnel and link
the interests of management and stockholders through equity-based compensation.
The Committee also administers the Company's stock incentive plans.
SENIOR EXECUTIVE COMPENSATION. The Company is the holding company for Saks
& Company, a wholly-owned subsidiary that does business as Saks Fifth Avenue.
The Company's executive officers are also executive officers of Saks. Mr. Miller
and Mr. Kendrick, the Chief Executive Officer and the Chief Operating Officer of
the Company, respectively (the "Principals"), have employment agreements with
the Company that were negotiated prior to the Company's initial public offering.
Under the Employment Agreements, each executive receives a base salary and is
eligible to receive bonuses at the discretion of the Board of Directors. The
Board of Directors has delegated to the Committee the authority to evaluate and
recommend the level of bonuses for the Principals. For 1997, the key elements of
compensation for the Principals were base salary and stock options issued as
long-term incentive awards under the New Incentive Plan. The Committee evaluates
the Chief Executive Officer's compensation on the same criteria applicable to
the other Principal. Accordingly, the discussion in this Report of the Chief
Executive Officer's compensation is combined with the discussion of the other
Principal's compensation.
COMPENSATION OF OTHER OFFICERS. Compensation of the Company's other
executive officers consists generally of salary and annual bonus. These terms
are generally reflected in employment agreements entered into with the officers
which, as discussed above, provide the Company considerable discretion in the
award of non-salary compensation. Periodically, these officers are also granted
stock options. After reviewing the recommendations of the Principals, the
Committee establishes annual bonus pools for the officers of Saks, including the
Company's other executive officers, and ratifies the selection of performance
criteria used under matrices for determining the size of such bonuses. The
Principals then determine, subject to Committee oversight, the actual bonus
amount paid to these other executive officers.
1997 FISCAL YEAR COMPENSATION
BASE SALARY. The base salary of each of the Principals was set in
accordance with his Employment Agreement which is subject to discretionary
increases by the Board of Directors. Mr. Miller's base salary for 1997 was
maintained at the level established in 1996. Mr. Kendrick received a raise in
August 1997 in connection with his annual review. Ms. Johnson and Mr. Zannino
each received a raise in August 1997 in connection with his or her annual review
and again in January 1998 in connection with his or her assumption of increased
responsibilities.
STOCK OPTION GRANTS. Following the 1996 fiscal year, the Compensation
Committee determined that, to motivate the Company's officers to enhance the
Company's stock price, the Committee would make a two-tier option grant in May
1997. The size of the option grants were determined by the Committee in
connection with the Committee's decisions with respect to annual cash bonuses.
The first-tier stock options were granted at a price slightly above market
price. The second-tier stock options were granted at a price significantly above
market price in order to align the interests of management with greater stock
appreciation.
11
<PAGE>
ANNUAL BONUS. The Committee met after the end of the 1997 fiscal year to
determine the annual bonuses that the Committee would recommend to the Board of
Directors for the Principals for the previous fiscal year. In determining the
bonuses to be awarded to each of the Principals, the Committee had broad
latitude to determine the performance criteria that it would consider for
purposes of evaluating the Principals. Although the Committee determined that
most of the Company's financial performance and personal performance goals had
been met in fiscal 1997, because these achievements were not adequately
recognized by the stock market, and in light of the options that were granted in
May 1997, the Committee recommended, and the Board approved, that no annual cash
bonuses be paid to the Principals. As of the date of this proxy statement, the
Committee had not determined whether bonuses would be granted to other officers
of Saks, and if so, the amount and basis of such bonuses.
SECTION 162(M)
Section 162(m) of the Internal Revenue Code limits to $1 million the
deductibility of compensation received in any one year by certain executive
officers of publicly traded companies, unless the compensation is paid under an
arrangement that satisfies the Internal Revenue Code definition of "performance-
based compensation." With respect to salary and bonus programs, the Committee
believes that it is important to insure flexibility in the Company's
compensation arrangements and criteria, even though this policy may result in
payments that do not qualify as "performance-based compensation" under Section
162(m). Nevertheless, the Committee believes that amounts realized upon the
exercise of employee stock options granted by the Company will qualify as
"performance-based compensation," and therefore that such amounts will not count
against the $1 million threshold. The Committee intends to review this issue
from time to time in the context of evaluations of the Company's overall
compensation policies.
RESPECTFULLY SUBMITTED,
COMPENSATION AND HUMAN RESOURCES
COMMITTEE
STEPHEN I. SADOVE, CHAIRMAN
E. GARRETT BEWKES III
JON P. HEDLEY
CHARLES J. PHILIPPIN
BRIAN RUDER
SAVIO W. TUNG
The above report of the Compensation and Human Resources Committee shall not
be deemed incorporated by reference by any general statement incorporating by
reference this Proxy Statement into any filing under the Securities Act of 1933
or under the Securities Exchange Act of 1934, except to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the executive officers of the Company served on the Board of
Directors or on the compensation committee of any other entity whose officers
served either on the Board of Directors or on the compensation committee of the
Company.
Investcorp and its affiliates have an ownership interest in, control a
majority of the voting stock of, and have directors serving on the board of
directors of Ebel S.A. ("Ebel"), a Swiss manufacturer and distributor of
watches, and Chaumet International S.A. ("Chaumet"), a French retailer of
jewelry, gems and other luxury products. Saks distributes the products of Ebel
and Chaumet through its stores. Saks believes that the terms of each these
arrangements is on an arms' length basis. Except for these arrangements, Saks
has no business relationships with Investcorp or any of its affiliates or
related parties.
12
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
COMPARISON OF THE CUMULATIVE RETURN AMONG THE COMPANY, THE S&P 500 STOCK INDEX
AND THE S&P RETAIL (DEPARTMENT STORES)-500 STOCK INDEX
Set forth below is a line graph comparing the cumulative total stockholder
return on the Company's Common Stock against the cumulative total return of the
Standard & Poor's 500 Stock Index and the Standard & Poor's Retail (Department
Stores)-500 Stock Index for the period commencing on May 22, 1996, the date of
the Company's stock became publicly traded, and ending January 30, 1998, the
last day of the Company's fiscal year in which the market was open. The graph
and table assume that $100 was invested on May 22, 1996 in each of the Company's
Common Stock, the Standard & Poor's 500 Stock Index and the Standard & Poor's
Retail (Department Stores)-500 Stock Index and that all dividends were
reinvested. This data was furnished by Standard & Poor's Compustat Services,
Inc.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
5/22/96 JAN-97 JAN-98
<S> <C> <C> <C>
Saks Holdings, Inc $100 $82.31 $64.98
Retail (Dept. Stores)
500 100 88.19 115.66
S&P 500 100 118.47 150.35
</TABLE>
<TABLE>
<CAPTION>
INDEXED RETURNS
BASE FISCAL YEAR ENDING
PERIOD --------------------
COMPANY/INDEX 5/22/96 1/97 1/98
- -------------------------------------------------------------------------------------- ----------- --------- ---------
<S> <C> <C> <C>
SAKS HOLDINGS INC..................................................................... $ 100 $ 82.31 $ 64.98
RETAIL (DEPT. STORES)-500............................................................. 100 88.19 115.66
S&P 500............................................................................... 100 118.47 150.35
</TABLE>
PROPOSAL 2. RATIFICATION OF COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS
The selection of Coopers & Lybrand L.L.P. as the Company's independent
public accountants for fiscal year 1998 has been approved by the Board of
Directors. Coopers & Lybrand L.L.P. has served as the Company's independent
public accountants since 1990. The stockholders of the Company are requested to
ratify this selection. This proposal is put before the stockholders in
conformity with the general corporate governance and compliance practice of
seeking stockholder approval of the selection of independent public accountants.
If the stockholders do not approve this selection, the Board of Directors will
reconsider the appointment.
13
<PAGE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION OF
COOPERS AND LYBRAND L.L.P. AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS.
The audit for the Company for the fiscal year ending January 31, 1998, was
conducted by Coopers & Lybrand L.L.P. A representative of Coopers & Lybrand
L.L.P. is expected to attend the Meeting and will have the opportunity to make a
statement and/or respond to appropriate questions from stockholders present at
the Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning beneficial
ownership of the Company's Common Stock by (i) each person known by the Company
to own beneficially more than five percent of the outstanding shares of the
Common Stock, (ii) each director of the Company, (iii) each Named Executive
Officer, and (iv) all directors and executive officers of the Company as a
group. Unless otherwise indicated, all information is as of January 31, 1998.
Unless otherwise indicated, all amounts reflected in the table represent shares
in which the beneficial owners have sole voting and investment power.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY
NAME OWNED PERCENT
- ------------------------------------------------------------------------------------- ----------------- -----------
<S> <C> <C>
Investcorp S.A....................................................................... 9,584,049(1) 15.18%
SIPCO Limited........................................................................ 9,570,049(2) 15.16%
His Royal Highness Prince Alwaleed Bin Talal Bin Abdulaziz Al Saud................... 3,398,189(3) 5.38%
Philip B. Miller..................................................................... 566,818(4) *
Brian E. Kendrick.................................................................... 278,771(4) *
E. Garrett Bewkes III................................................................ 1,500 *
Jon P. Hedley........................................................................ 45,000 *
Charles J. Philippin................................................................. 15,000 *
Brian Ruder.......................................................................... 5,000 *
Stephen I. Sadove.................................................................... 1,000 *
Savio W. Tung........................................................................ 99,325 *
Owen E. Dorsey....................................................................... 28,386(4) *
Christina Johnson.................................................................... 24,152(4) *
Richard F. Zannino................................................................... 54,612(4) *
All directors and executive officers as a group (13 people).......................... 1,096,162(5) 1.7%
</TABLE>
- ------------------------
* Less than one percent.
(1) Investcorp does not directly own any shares of Common Stock. Beneficial
ownership includes 5,334,070 shares owned by two indirect, wholly-owned
subsidiaries of Investcorp. The remainder of the shares shown as
beneficially owned by Investcorp consists of the shares owned by certain
Cayman Islands corporations, none of which is a beneficial owner of five
percent or more of the Common Stock. Investcorp may be deemed to share
beneficial ownership of the shares of Common Stock held by such entities
because such entities or their stockholders or principals have entered into
revocable management services or similar agreements with an affiliate of
Investcorp pursuant to which each such entity has granted such affiliate the
authority to direct the voting and disposition of the stock owned by such
entity for so long as such agreement is in effect. Investcorp is a
Luxembourg corporation, with its registered address at 37 rue Notre-Dame,
Luxembourg.
(2) SIPCO Limited ("SIPCO") does not directly own any Common Stock. The number
of shares shown as owned by SIPCO consists of the shares Investcorp is
deemed to beneficially own. SIPCO may be deemed to control Investcorp
through its ownership of a majority of the stock of a company which
indirectly owns a majority of Investcorp's outstanding stock. SIPCO is a
Cayman Islands corporation
14
<PAGE>
with its address at P.O. Box 1111, West Wind Building, George Town, Grand
Cayman, Cayman Islands, British West Indies.
(3) His Royal Highness Prince Alwaleed Bin Talal Bin Abdulaziz Al Saud does not
directly own any Common Stock. The number of shares shown as owned by him
include all of the shares held by SFA Saudi Holdings Limited, of which he
owns a majority of the outstanding stock. Share ownership is based on
information provided as of September 19, 1996. The business address of His
Royal Highness Prince Alwaleed Bin Talal Bin Abdulaziz Al Saud is c/o
Kingdom Establishment Trading and Contracting, P.O. Box 8653, Riyadh 11492,
Saudi Arabia.
(4) Includes the following shares of Common Stock, purchasable within 60 days of
January 31, 1998, upon the exercise of stock options by the following
individuals: Mr. Miller (422,808 shares), Mr. Kendrick (270,016 shares), Ms.
Johnson (21,067 shares), Mr. Dorsey (26,601 shares) and Mr. Zannino (53,312
shares).
(5) Includes shares of Common Stock purchasable within 60 days of January 31,
1998.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers, and persons who own more than ten percent of the
Common Stock to file reports of beneficial ownership with the Securities
Exchange Commission, the New York Stock Exchange and the Company. Based solely
upon its review of the copies of such forms received by it, the Company believes
that, during fiscal year 1997, all filing requirements applicable to such
persons were complied, except that in 1997 the Company did not file timely a
form reporting options granted to Ms. Johnson in August 1996.
STOCKHOLDER PROPOSALS
The Company's Bylaws permit stockholders to submit proposals which they
believe should be voted upon at the Meeting or nominate persons for election to
the Board of Directors. Any such proposals or nominations must comply with the
advance notice provisions of the Company's Bylaws, as amended. The advance
notice provision of the Company's Bylaws require that any proposal or nomination
must be submitted in writing to the Secretary of the Company not less than 90
days nor more than 120 days prior to the first anniversary of the preceding
year's annual meeting of stockholders. The submission must include certain
specified information concerning the proposal or nominee, as the case may be,
and information as to the proponent's ownership of Common Stock of the Company.
Proposals or nominations not meeting these requirements will not be entertained
at the Meeting. To make a submission or to obtain additional information as to
the proper form and content of the submissions, contact the Secretary of the
Company at: Saks Holdings, Inc., Attn.: Secretary, 12 East 49th Street, New
York, New York 10017; phone: (212) 940-4048.
Pursuant to applicable rules under the Securities Exchange Act of 1934, some
stockholder proposals may be eligible for inclusion in the Company's 1999 Proxy
Statement. Any such stockholder proposal must be submitted in writing to the
Secretary of the Company no later than January 1, 1999. Stockholders interested
in submitting such a proposal are advised to contact counsel with regards to the
detailed requirements of such securities rules.
MISCELLANEOUS
A copy of the Company's 1997 Annual Report to Stockholders has been
delivered free of charge to stockholders with this solicitation. A copy of the
Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1998
is available free of charge on request by writing to the Secretary of the
Company at the Company's principal address.
15
<PAGE>
The costs of the solicitation of proxies will be borne by the Company. Such
costs include preparation, printing and mailing of the Notice of Annual Meeting
of Stockholders, this Proxy Statement, the enclosed proxy and the Company's 1997
Annual Report, and the reimbursement of brokerage firms and others for
reasonable expenses incurred by them in connection with the forwarding of proxy
solicitation materials to beneficial owners. The solicitation of proxies will be
conducted primarily by mail, but may include telephone, facsimile or oral
communications by directors, officers, or regular employees of the Company
acting without special compensation.
------------------------
Please complete, date, sign and mail promptly the accompanying proxy in the
postage-paid envelope enclosed for your convenience. The signing of the proxy
will not prevent your attending the Meeting and voting in person.
New York, New York
May 1, 1998
16
<PAGE>
Front of Common Card
your votes as /X/
indicated by
this example
1. Election of Directors
FOR all Nominees WITHHOLD
listed to the right AUTHORITY
(with exceptions noted) to vote for all Nominees
listed to the right
|_| |_|
NOMINEES: Philip B. Miller, Brian E. Kendrick, E. Garrett Bawkes III, Jon P.
Hedley, Charles J. Philippin, Brian Ruder, Stephen I. Sadove and Savio W. Tung
Withheld for the following only: (Write the name(s) of the Nominee(s) in the
space below,)
- --------------------------------------------------------------------------------
I plan to attend the
Annual Meeting. |_|
2. Ratification of the appointment of Coopers & Lybrand L.L.P. as independent
public accountants for the 1998 fiscal year.
FOR AGAINST ABSTAIN
|_| |_| |_|
Please mark, date and sign exactly as your name appears hereon and return in the
enclosed envelope. If acting as executor, administrator, trustee, guardian,
etc., you should so indicate when signing. If the signer is a corporation,
please sign the full corporate name, by duly authorized officer. If shares are
held jointly, each stockholder named should sign.
Dated: ________________________________________________________, 1998
---------------------------------------------------------------------
Signature(s) of Stockholder(s)
---------------------------------------------------------------------
Signature(s) of Joint Stockholder(s)
---------------------------------------------------------------------
Title
- --------------------------------------------------------------------------------
^FOLD AND DETACH HERE^
NOTICE: IF YOU PLAN ON ATTENDING THE 1998 ANNUAL MEETING,
PLEASE CHECK THE BOX ON THE PROXY CARD ABOVE.
AN ADMISSION TICKET WILL BE MAILED TO YOU.
NO ADMISSION WILL BE GRANTED WITHOUT AN ADMISSION TICKET.
SAKS
FIFTH
AVENUE
Saks Holdings, Inc.
Annual Meeting of Stockholders
June 15, 1998, 10:00 a.m. (local time)
Chase Manhattan Bank
270 Park Avenue
11th Floor
New York, New York
<PAGE>
COMMON STOCK COMMON STOCK
SAKS HOLDINGS, INC.
ANNUAL MEETING OF STOCKHOLDERS
JUNE 15, 1998
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Philip B. Miller and Brian E. Kendrick, and each of them, with joint
powers of substitution, are hereby authorized to represent and vote all shares
of Common Stock of the undersigned at the Annual Meeting of Stockholders of Saks
Holdings, Inc. to be held at the Chase Manhattan Bank, 270 Park Avenue, 11th
Floor, New York, New York on Monday, June 15, 1998 at 10:00 a.m. and at any
adjournments thereof. The undersigned hereby revokes any Proxy previously given
and acknowledges receipt of the Notice of Annual Meeting and Proxy Statement,
dated May 1, 1998, and a copy of the Annual Report for the year ended January
31, 1998.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
UNDERSIGNED. THE BOARD OF DIRECTORS OF SAKS HOLDINGS, INC. RECOMMENDS A VOTE FOR
THE NOMINEES SET FORTH ON THE REVERSE SIDE AND FOR PROPOSAL 2. IF THIS PROXY IS
SIGNED AND RETURNED AND DOES NOT SPECIFY A VOTE ON ANY PROPOSAL, THE PROXY WILL
BE SO VOTED.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE. PLEASE SIGN ON THE
REVERSE SIDE AND RETURN PROMPTLY.
- --------------------------------------------------------------------------------
^FOLD AND DETACH HERE^
[Back of Common Card]
<PAGE>
Front of Employee Card
your votes as /X/
indicated by
this example
1. Election of Directors
FOR all Nominees WITHHOLD
listed to the right AUTHORITY
(with exceptions noted) to vote for all Nominees
listed to the right
|_| |_|
NOMINEES: Philip B. Miller, Brian E. Kendrick, E. Garrett Bawkes III, Jon P.
Hedley, Charles J. Philippin, Brian Ruder, Stephen I. Sadove and Savio W. Tung
Withheld for the following only: (Write the name(s) of the Nominee(s) in the
space below)
- --------------------------------------------------------------------------------
I plan to attend the
Annual Meeting. |_|
2. Ratification of the appointment of Coopers & Lybrand L.L.P. as independent
public accountants for the 1998 fiscal year.
FOR AGAINST ABSTAIN
|_| |_| |_|
Please mark, date and sign exactly as your name appears hereon and return in the
enclosed envelope. If acting as executor, administrator, trustee, guardian,
etc., you should so indicate when signing. If the signer is a corporation,
please sign the full corporate name, by duly authorized officer. If shares are
held jointly, each stockholder named should sign.
Dated: ________________________________________________________, 1998
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Signature(s) of Stockholder(s)
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Signature(s) of Joint Stockholder(s)
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Title
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^FOLD AND DETACH HERE^
NOTICE: IF YOU PLAN ON ATTENDING THE 1998 ANNUAL MEETING,
PLEASE CHECK THE BOX ON THE PROXY CARD ABOVE.
AN ADMISSION TICKET WILL BE MAILED TO YOU.
NO ADMISSION WILL BE GRANTED WITHOUT AN ADMISSION TICKET.
SAKS
FIFTH
AVENUE
Saks Holdings, Inc.
Annual Meeting of Stockholders
June 15, 1998, 10:00 a.m. (local time)
Chase Manhattan Bank
270 Park Avenue
11th Floor
New York, New York
<PAGE>
COMMON STOCK COMMON STOCK
CONFIDENTIAL VOTING INSTRUCTIONS
TO: FIDELITY MANAGEMENT TRUST COMPANY
AS TRUSTEE UNDER THE
SAKS FIFTH AVENUE 401(K) RETIREMENT SAVINGS PLAN
WITH RESPECT TO THE
SAKS HOLDINGS, INC.
ANNUAL MEETING OF STOCKHOLDERS
JUNE 15, 1998
THIS INSTRUCTION CARD IS SOLICITED BY THE PLAN TRUSTEE
I hereby instruct the Trustee to vote (in person or by proxy) all shares of
Common Stock of Saks Holdings, Inc. that are credited to my account under the
above-referenced Plan at the Annual Meeting of Stockholders of Saks Holdings,
Inc. to be held at the Chase Manhattan Bank, 270 Park Avenue, 11th Floor, New
York, New York on Monday, June 15, 1998 at 10:00 a.m. and at any adjournments
thereof. The undersigned hereby revokes any instructions previously given and
acknowledges receipt of the Notice of Annual Meeting and Proxy Statement, dated
May 1, 1998, and a copy of the Annual Report for the year ended January 31,
1998.
THE SHARES REPRESENTED BY THIS INSTRUCTION CARD WILL BE VOTED BY THE
TRUSTEE AS DIRECTED BY THE UNDERSIGNED. THE BOARD OF DIRECTORS OF SAKS HOLDINGS,
INC. RECOMMENDS A VOTE FOR THE NOMINEES SET FORTH ON THE REVERSE SIDE AND FOR
PROPOSAL 2. IF THIS INSTRUCTION CARD IS SIGNED AND RETURNED AND DOES NOT SPECIFY
A VOTE ON ANY PROPOSAL, THE INSTRUCTION CARD WILL BE SO VOTED.
THIS INSTRUCTION CARD IS CONTINUED ON THE REVERSE SIDE. PLEASE SIGN ON THE
REVERSE SIDE AND RETURN PROMPTLY.
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^FOLD AND DETACH HERE^
[Back of Employee Card]
