EVANS
Notice of Annual Meeting of Stockholders
To Be Held July 21, 1998
To the Stockholders of Evans, Inc.:
The 1998 Annual Meeting to Stockholders of Evans, Inc. will be held
at One First National Plaza, 57th Floor, Chicago, Illinois, 60603 on
Tuesday, July 21, 1998, at 10:00 a.m., Central Daylight Time, for the
following purposes:
1. To elect two Class I directors to serve until the 2001 Annual
Meeting of Stockholders and one Class II director to serve until the
1999 Annual Meeting of Stockholders.
2. To ratify the selection of Coopers & Lybrand LLP as the independent
auditors for the Company for the fiscal year ending February 27,
1999.
3. To consider and transact such other matters as may properly come
before the meeting or any adjournments thereof.
Only stockholders of record at the close of business on June 1, 1998 are
entitled to notice of and to vote at the meeting or any adjournments
thereof. A list of such stockholders will be kept at the office of the
Secretary at 36 South State Street, Chicago, Illinois, during the ten days
prior to the meeting.
By Order of the Board of Directors,
SAMUEL B. GARBER
Vice President,
General Counsel and Secretary
Chicago, Illinois
June 18, 1998
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO COMPLETE, SIGN, DATE AND PROMPTLY RETURN YOUR PROXY CARD
IN THE ENCLOSED SELF-ADDRESSED POSTAGE-PAID ENVELOPE REGARDLESS OF WHETHER
YOU PLAN TO ATTEND THE MEETING.
<PAGE>
EVANS
36 SOUTH STATE STREET
CHICAGO, ILLINOIS 60603
Proxy Statement
for
1998 Annual Meeting of Stockholders
July 21, 1998
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Evans, Inc. (the "Company") of proxies for use at the
Annual Meeting of Stockholders of the Company to be held at One First National
Plaza, 57th Floor, Chicago, Illinois 60603 on Tuesday, July 21, 1998 at 10:00
a.m. Central Daylight Time for the purposes set forth in the Notice of Annual
Meeting of Stockholders. The approximate mailing date of this material is June
19, 1998.
Shares represented by valid proxies in the form enclosed which are
received prior to the Annual Meeting will be voted in accordance with the
directions contained therein. Any proxy returned without specification as to any
matter will be voted in accordance with the recommendation of the Board of
Directors. A stockholder who attends the Meeting may vote in person rather than
by proxy if he so desires. A stockholder may revoke his proxy at any time before
it is exercised.
VOTING SECURITIES
The close of business on June 1, 1998 has been fixed as the record date
for the determination of stockholders entitled to notice of and to vote at the
Annual Meeting. On such date, the Company had outstanding 5,050,245 shares of
Common Stock (not including 1,283,190 shares held in its treasury), each of
which is entitled to one vote on all matters voted upon at the Annual Meeting.
Under Section 216 of the Delaware General Corporation Law and the Company's
By-laws, a majority of the shares of the Company's Common Stock, present in
person or represented by proxy, shall constitute a quorum for purposes of the
Meeting. In all matters other than the election of directors, the affirmative
vote of the majority of shares present in person or represented by proxy at the
Meeting and entitled to vote on the subject matter shall be the act of the
shareholders. Directors shall be elected by a plurality of the votes present in
person or represented by proxy at the Meeting and entitled to vote on the
election of directors. Abstentions are treated as votes against a proposal and
broker non-votes have no effect on the vote. Abstentions and broker non-votes
are counted for purposes of determining a quorum.
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth the Common Stock of the Company owned as of
June 1, 1998 by persons who were known by the Company to own beneficially more
than 5% of the Company's outstanding Common Stock.
Amount of
Name and Address Beneficial
of Beneficial Owner Ownership Percent
D.B.
Meltzer......................................1,071,720 (1) 21.2
36 South State Street
Chicago, IL 60603
Peter Cundill & Associates (Bermuda), Ltd.
...............................................678,811 (2) 13.4
Clarendon House
Church Street
Hamilton, Bermuda
Dimensional Fund Advisors, Ltd.
...............................................476,400 (3) 9.4
1299 Ocean Avenue
Santa Monica, CA 90401
- - ------
(1)Including (a) 160,200 shares held in trust for benefit of Mr. Meltzer, with
the trustee and Mr. Meltzer having shared voting and investment power and (b)
an option to acquire 40,000 shares.
(2)As reported in Schedule 13D filed by said firm on May 14, 1998 with the
Securities and Exchange Commission which report reflects sole voting power as
to 133,400 shares, shared voting power as to 383,854 shares, sole dispositive
power as to 383,854 shares and shared dispositive power as to 294,957 shares.
(3)As reported in Schedule 13G dated February 9, 1998 filed by said firm with
the Securities and Exchange Commission which report reflects sole voting
power as to 291,700 shares, shared voting power as to 184,700 shares and sole
dispositive power as to all shares.
1. ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation provides for the
classification of the Board of Directors into three classes, as nearly equal in
number as possible, with the term of office of one class expiring each year.
Unless otherwise instructed, the enclosed proxy will be voted to elect Robert K.
Meltzer and Ernest R. Wish as Class I directors for a term of three years
expiring at the 2001 Annual Meeting of Stockholders and Samuel B. Garber as a
Class II director for a term of one year expiring at the 1999 Annual Meeting of
Stockholders and until their respective successors are duly elected and
qualified. If any of the nominees should become unavailable, such proxy will be
voted for a substitute nominee or nominees proposed by the Board of Directors.
Management does not anticipate that any nominee will become unavailable.
<PAGE>
The following table provides information concerning each Director and
nominee for election as a Director, and except as otherwise indicated, the
persons named in the table have sole voting and investment power with respect to
the shares of Common Stock shown as beneficially owned by them.
Amount and
Year Nature of
First Beneficial Percentage of
Name and Became Ownership Outstanding
Principal Occupation (1) Age Director June 1, 1998 Common Stock
------------------------ --- -------- ----------- ------------
Nominees to serve until the 2001 Annual Meeting
of Stockholders (Class I)
Robert K.
Meltzer............................44 1981 238,144 (2) 4.7
President and Chief Executive Officer
Ernest R.
Wish...............................67 1994 39,168 (3) .8
Chairman, Wish Residential Management, Inc.
(a real estate management firm)
Nominee to serve until the 1999 Annual Meeting
of Stockholders (Class II)
Samuel B. Garber...................63 1998 87,000 (4) 1.7
Vice President, General Counsel and Secretary
Continuing Directors Having a Term of Office Expiring
at the 1999 Annual Meeting of Stockholders (Class II)
Dennis S. Bookshester..............59 1991 34,694 (3) .7
Chairman of the Board of Directors of Cutanix Corp.
(a skin care research company) Director, Fruit of the
Loom, Inc., Playboy Enterprises, Inc., Sundance
Homes, Inc., Arthur Treacher's, Inc.
Edmond D. Cicala...................72 1996 34,694 (3) .7
President, Edmond Enterprises, Inc., (a retail
consulting firm); Director, National Commerce
Bancorp., Proffitt's. Inc.
Continuing Directors Having a Term of Office Expiring
at the 2000 Annual Meeting of Stockholders (Class III)
Gwendolyn L. Hatten-Butler.........42 1995 34,694 (3) .7
Managing Director, Bear, Stearns & Co. Inc.
(an investment banking firm)
David B.
Meltzer............................69 1960 1,071,720 (5)(6) 21.2
Chairman of the Board
Harold Sussman(7)..................88 1963 161,000 (2)(8) 3.2
Retired Executive Vice President
of the Company
Allofficers and directors as a group (11 persons)
1,702,614 33.7
- - ---------
(1) Each director has been an officer of the Company, or has been principally
employed in the capacity
stated, for the past five years, with the exception of Gwendolyn L.
Hatten-Butler, Dennis S. Bookshester and Ernest R. Wish. Ms.
Hatten-Butler was Senior Capital Advisor, SEI Corporation 1992 to 1994,
since May 1994, Associate Director, Bear, Stearns & Co. Inc and since
October, 1997 Managing Director, Bear, Stearns & Co. Mr. Bookshester was
an independent business consultant from 1992 to January, 1997 and was
President and CEO of H20, L.P. from February, 1997 to July, 1997, and from
July, 1997 is Chairman of the Board of Directors of Cutanix Corp. Mr.
Wish was a business consultant from 1992 to 1993, City Clerk, City of
Chicago, September 1993 through April, 1995, Director of Revenue, City of
Chicago, July, 1995 to December, 1996, and Chairman, Wish Residential
Management, Inc., since December, 1996.
(2) Includes an option to acquire 50,000 shares and 2,000 shares held as
custodian for the benefit of Mr.Meltzer's children of which beneficial interest
is disclaimed. Robert K. Meltzer is the son of D. B. Meltzer.
(3) Includes an option to acquire 10,000 shares. (4) Includes an option to
acquire 75,000 shares. (5) Includes an option to acquire 40,000 shares. (6)
See (1) under "Principal Stockholders" above.
(7) Mr. Sussman is married to the sister of the late A.L. Meltzer, father of
D. B. Meltzer.
(8) Includes 30,006 shares held by Mr. Sussman's wife and 7,200 shares held
by trusts of which Mrs. Sussman is a co-trustee, as to which beneficial
ownership is disclaimed.
<PAGE>
INFORMATION ABOUT THE BOARD OF DIRECTORS,
COMMITTEES OF THE BOARD OF DIRECTORS AND
DIRECTORS' COMPENSATION
The Board of Directors maintains an Audit Committee, a Compensation
Committee and an Executive Committee. The Company does not have a standing
nominating committee or any committee performing similar functions.
The members of the Audit Committee are Ms. Hatten-Butler, (Chairman) and
Messrs. Bookshester and Wish. The Audit Committee's primary function is to
assist in fulfilling the Board's functions relating to the Company's financial
statements, the scope of the audit, any comments made by the independent public
accountants upon the financial condition of the Company and its accounting
controls and procedures and such other matters as the Committee deems
appropriate. The Committee held two meetings during the last fiscal year.
The Compensation Committee is comprised solely of directors who are not
employees of the Company. The Compensation Committee held two meetings during
the last fiscal year. The function of the Committee is to make recommendations
to the Board of Directors with respect to the compensation of executive officers
of the Company and the granting of stock options to selected key employees. The
members of the Compensation Committee are Messrs. Wish (Chairman), Bookshester
and Sussman.
The members of the Executive Committee are Messrs. Wish (Chairman), Cicala
and Robert K. Meltzer. The Executive Committee has and may exercise all of the
authority of the Board of Directors with respect to the management of the
Company's business, except with respect to certain specified matters that by
law, the Restated Certificate of Incorporation or By-Laws must be approved by
the entire Board of Directors. All actions taken by the Executive Committee were
ratified unanimously by the full Board of Directors. The Committee held nine
meetings during the last fiscal year.
Certain Director fees are paid in shares of the Company's Common Stock.
The Annual Fee ($8,000) and the fee for the first four meetings ($1,500 per
meeting) of the Board of Directors are paid in the Company's Common Stock based
upon the market price at date of issuance. Additionally, directors may elect to
receive compensation in shares of stock or in cash for the meetings of the Board
of Directors in excess of four meetings and for all Committee meetings
($1,000.00 per meeting). In addition, a cash payment of 35 percent of the value
of shares issued is paid to each director to offset income taxes payable as a
result of the issuance of shares. Directors are reimbursed for expenses incurred
by them on behalf of the Company. Directors who are also employees of the
Company receive no additional compensation for serving on the Board of
Directors.
Pursuant to the Evans, Inc. 1994 Stock Option Program, on May 10, 1994,
each director of the Company who was not otherwise an officer or employee of the
Company, or its subsidiaries or affiliates, was granted a nonstatutory option to
purchase 10,000 shares of Common Stock, having an exercise price of $3.50 per
share, which was the fair market value of the shares on the date of grant. Any
person who initially becomes a director after May 9, 1994 and who is not
otherwise an officer or employee of the Company, or its subsidiaries or
affiliates, shall automatically be awarded a grant of nonstatutory options to
purchase 10,000 shares of Common Stock, having an exercise price per share equal
to the fair market value of the shares as of the date such person becomes a
director. All such options expire ten years after the date of grant and are
immediately exerciseable.
The Board of Directors met five times during the fiscal year ended
February 28, 1998. Each director attended 100% or all of the meetings of the
Board of Directors and of the Committees on which he or she served.
Mr. David B. Meltzer did not receive Director's fees; however, he
received $75,000 in salary from the Company during fiscal 1998 for serving as
Chairman of the Board of Directors. Mr. Meltzer's other compensation
includes $2,520 as the dollar value of insurance premiums paid with respect
to term life insurance.
The Company, on April 27, 1998, entered into a Consulting Agreement with
Mr. Wish for a three year period ending December 31, 2000. He has agreed to
provide consulting and advisory services to the Company and its subsidiaries
with respect to the development of overall strategy for the operations of the
Company and its subsidiaries. The Consulting Agreement provides for a fee of
144,000 shares of Evans Common Stock, a non-statutory Stock Option to acquire
100,000 shares of Evans Common Stock at an exercise price equal to the market
price of the Common Stock on the date the Consulting Agreement was approved by
the Company's Board of Directors and for reimbursement of all reasonable
expenses in connection with performance of his services. In addition, Mr. Wish
receives $1,000 per month as a draw against any expenses he may incur. The Stock
Option expires December 31, 2008, and is exercisable in three equal installments
on each December 31 during the consulting period. If Mr. Wish dies or is
disabled during the term of the Consulting Agreement up to 96,000 shares will be
returned to the Company.
Section 16 (a) Beneficial Ownership Reporting Compliance
Section 16 (a) of the Securities and Exchange Act of 1934 requires the
Company's officers, directors and greater than 10% stockholders to file certain
reports with respect to beneficial ownership of the Company's equity securities.
Based on information provided to the Company by each director and executive
officer, the Company believes all reports to be filed in fiscal 1998 were timely
filed.
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table discloses compensation received by the Company's Chief
Executive Officer and the other persons serving as the next most highly paid
executive officers for the three fiscal years ended February 28, 1998, and the
Company's former Chief Executive Officer.
Long-Term
Annual Compensation (1) Compensation
Awards
Securities
Name and Underlying All Other
Principal Position Year Salary Options (#) Compensation (2)
Robert K. Meltzer 1998 $190,000 ---- 672
President and CEO 1997 186,250 ---- 655
1996 175,000 50,000 326
John A. Sarama 1998 $150,000 ---- 557
Vice President,
Operations 1997 140,914 ---- 326
1996 125,000 20,000 326
William E. Koziel 1998 $120,000 ---- 211
Vice President,
Finance 1997 117,938 ---- 211
1996 105,271 10,000 211
Samuel B. Garber 1998 $115,000 ---- 2246
Vice President, 1997 115,000 ---- 2246
General Counsel and 1996 110,000 75,000 2246
Secretary
Patrick J. Regan (3) 1998 $245,000 ---- 557
Former President and 1997 244,992 ---- 557
Chief Executive
Officer 1996 175,000 100,000 557
(1)The dollar value of perquisites and other personal benefits for each of the
named officers was less than the established reporting thresholds. No bonuses
have been paid for the periods presented.
(2)"All Other Compensation" only includes the dollar value of insurance
premiums paid with respect to term life insurance.
(3)Mr. Regan resigned as President and Chief Executive Officer in November,
1997 but remains as a consultant to the Company. His options expired without
being exercised.
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
Set forth in the following table is information concerning unexercised
options held by the named executive officers at the end of the fiscal year ended
February 28, 1998. No named executive officer exercised any stock options during
fiscal year 1998.
Number of Securities Total Value of Unexercised
Underlying Unexercised Options In-The-Money Options
at February 28, 1998(#) Held at February 28, 1998
Name Exercisable Unexercisable Exercisable Unexercisable
Robert K. Meltzer 50,000 -0- -0- -0-
John A. Sarama 20,000 -0- -0- -0-
William E. Koziel 10,000 -0- -0- -0-
Samuel B. Garber 75,000 -0- -0- -0-
Patrick J. Regan -0- -0- -0- -0-
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1998, the Compensation Committee of the Board of Directors included
Mr. Harold Sussman, who was formerly an officer of the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the Committee),
which is composed of three outside Directors, none of whom is presently an
officer or employee of the Company or any of its subsidiaries, has provided the
following report on executive compensation.
Compensation Philosophy
The Committee believes that corporate performance and, in turn,
shareholder value will be enhanced by a compensation system which supports and
reinforces the Company's key operating and strategic goals while aligning the
financial interest of the Company's executive officers with those of the
shareholders. The Company utilizes both short-term and long-term incentive
compensation programs to achieve this objective. These programs are tied to
store, regional, departmental and Company-wide business goals as well as
individual goals. For executive officers, the Company relies on an annual
incentive program and stock option program to align the executives' financial
interest with those of its shareholders.
Components of the Compensation Program
The Company's compensation program for executive officers consists of a
base salary, an annual incentive bonus program and a stock option program, all
of which are tied to the Company's success in achieving financial and strategic
performance goals. The Company's performance goals are proposed by management
and are approved by the Board of Directors of the Company as part of the
Company's budgeting process.
Base Salary
Each year, the Committee reviews proposals by the Company's Chief
Executive Officer ("CEO") for annual base salary for the executive officers
other than the CEO. In evaluating the CEO's proposals, the Committee considers
(1) the individual executive officer's performance including evaluations thereof
provided by the CEO and (2) the Company's performance in relation to its
performance goals, which includes pre-tax earnings.
Bonus Opportunities
The Company's revised Bonus Program provides for cash bonus awards based
upon the achievement of Company performance goals designated at the beginning of
each fiscal year. Consequently, if the performance goals are not met, no bonus
is payable. The current bonus program includes only objective performance goals
that preclude individual discretion, and does not include personal performance
as one of the performance-based criteria for the senior executives of the
Company. No cash bonuses were paid to executive officers for the fiscal years
1996, 1997 and 1998.
Long-Term Stock Related Incentives
The Company also has a long-term incentive program consisting of a stock
option program under which the Committee reviews and recommends proposed grants
of long-term incentive compensation in the form of stock options. The Committee
considers stock options to be an important means of insuring that senior
executives maintain their incentive to increase the profitability of the Company
and the value of the Company's stock. Whether a grant will be made to an
executive officer, and in what amount, is determined by the subjective
evaluation of the executive's ability to influence the Company's long-term
growth and profitability. Because the value of stock options is entirely a
function of the value of the Company's stock, the Committee believes that this
component of the Company's compensation arrangement aligns the interest of the
senior executives with those of the Company's shareholders. The Committee
granted no options to executive officers during the fiscal year ended February
28, 1997.
Chief Executive Officer's Compensation
Patrick J. Regan's compensation as Chief Executive Officer until his
resignation effective October 28, 1997, was structured in a manner consistent
with the guidelines described above. In order to provide for a smooth
transition, Mr. Regan entered into a Consulting Agreement with the Company that
provided for, among other things, the payment of his compensation for the
remainder of the fiscal year.
Prior to his election as Chief Executive Officer effective November 3,
1997, Robert K. Meltzer's compensation as Executive Vice President was
structured in accordance with the Executive Compensation Policy discussed above.
Upon his election as Chief Executive Officer, the Committee determined Mr.
Meltzer's compensation as Chief Executive Officer in a manner consistent with
the guidelines described above. With respect to bonus opportunity the Committee
evaluated the Company's performance with regard to its stated budget and
financial goals that were established at the time of Mr. Meltzer's election as
Chief Executive Officer and also evaluated Mr. Meltzer's personal performance in
view of the goals established for him in consultation with the Committee. The
Committee determined that while Mr. Meltzer did meet his personal performance
goals, because the Company did not meet the performance goals, no bonus would be
paid to Mr. Meltzer
Administration of Compensation Programs
The Committee oversees all compensation programs for senior management and
reviews and approves certain plans and programs for other employees. The
Committee reviews management recommendations and ultimately determines levels of
base salary, annual performance-based bonus payments and stock option grants for
all executives.
<PAGE>
The Committee also considered the effect of Internal Revenue Code Section
162(m), which imposes a $1 million limit per year on the corporate tax deduction
for compensation paid or accrued with respect to the top five executives of a
publicly-held corporation. Performance-based compensation that meets certain
requirements will not be subject to this deduction limit. The Committee will
continue to monitor the impact of the Section 162(m) limit and to assess various
alternatives to minimize or eliminate any loss of tax deductions in future
years, provided the alternatives are consistent with the objectives of the
Company's executive compensation program.
COMPENSATION COMMITTEE
Ernest R. Wish, Chairman
Dennis S. Bookshester
Harold Sussman
<PAGE>
Stock Price Performance Graph
The Stock Price Performance Graph set forth below compares the cumulative
total stockholder return on the Common Stock of the Company for the five-year
period beginning February 28, 1993 and ending February 28, 1998, with the
cumulative total return on the S&P 500 and a peer group index of Apparel
Specialty Chains over the same period (assuming the investment of $100 in the
Company's Common Stock, the S&P 500 and a peer group index on February 28, 1993,
reinvestment of all cash dividends and equalization of stock splits and
dividends).
Cumulative Total Return
2/93 2/94 2/95 2/96 2/97 2/98
Evans, Inc................................100 115 50 42 31 44
Peer Group................................100 87 96 51 60 48
S&P 500...................................108 116 157 198 267 100
The Company's peer group is comprised of four other apparel specialty chains:
Ann Taylor Stores Corporation, Cache Inc., Deb Shops Inc. and Gantos Inc.
Frederick's of Hollywood Inc., an original member of the peer group was
acquired by Knightsbridge Capital on September 30, 1997.
<PAGE>
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has appointed Coopers & Lybrand LLP, who has served
as the Company's independent auditors since 1962, to audit the financial
statements of the Company for the fiscal year ending February 27, 1999 and
proposes that stockholders approve such appointment. The Company expects a
representative of Coopers & Lybrand LLP to be present at the Annual Meeting with
the opportunity to make a statement if he so desires and to be available to
respond to appropriate questions. The affirmative vote of the holders of a
majority of the shares represented in person or by proxy at the meeting is
required to ratify the selection of Coopers & Lybrand LLP.
PROPOSALS OF STOCKHOLDERS FOR 1998 ANNUAL MEETING
Stockholder proposals may be submitted for inclusion in EVANS 1999 proxy
material after the 1998 Annual Meeting but no later than 5 p.m. CST on February
28, 1999. Proposals must be in writing and sent via registered, certified or
express mail to : Office of the Secretary, Evans, Inc., 36 South State Street,
Chicago, IL 60603. Facsimile or other forms of electronic submissions will not
be accepted.
FINANCIAL STATEMENTS
The Annual Report of the Company for the fiscal year ended February 28,
1998, is enclosed herewith but does not constitute a part of the proxy
soliciting material.
OTHER MATTERS
Management knows of no other matters which may be brought before the
Annual Meeting. However, if any other matter is presented to the Meeting on
which a vote properly may be taken, the persons named in the enclosed proxy will
vote thereon in accordance with their best judgment.
The enclosed proxy is solicited by the Board of Directors of the Company.
The cost of solicitation will be borne by the Company. In addition to the
solicitation of proxies by mail, directors, officers or employees of the Company
may solicit proxies personally or by telephone or telegraph, and the Company may
request persons holding stock in their names or names of their nominees to
obtain proxies from and send proxy material to their principals and will
reimburse such persons for their expenses in doing so.
To help assure a quorum at the Annual Meeting, please sign and mail the
enclosed proxy promptly in the envelope provided. The signing of the proxy will
not prevent your attending the Meeting and voting in person, should you desire.
All stockholders are cordially invited to attend the Meeting.
By Order of the Board of Directors
Samuel B. Garber
Vice President
General Counsel and Secretary
Chicago, Illinois
June 18, 1998
