<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
CLAIRE'S STORES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
CLAIRE'S STORES, INC.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 17, 1999
------------------------
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of Claire's Stores, Inc. (the "Company") will be held in the Regency
Room of the Pierre Hotel, 2 East 61st Street, New York, New York, on June 17,
1999 at 9:30 a.m., New York City time, or at any adjournment or postponement
thereof, for the following purposes:
1. To elect seven directors to the Board of Directors of the Company, each
for a one-year term; and
2. To transact such other business as may properly come before the Meeting
or any adjournment or postponement thereof.
Every holder of record of Common Stock, par value $.05 (the "Common
Stock"), and Class A Common Stock, par value $.05 (the "Class A Common Stock"),
as of the close of business on May 7, 1999 is entitled to notice of the Meeting
or any adjournment or postponement thereof, and to vote, in person or by proxy,
one vote for each share of Common Stock and ten votes for each share of Class A
Common Stock, as the case may be, held by such holder. A complete list of
stockholders entitled to vote at the Meeting will be available to any
stockholder for any purpose germane to the Meeting during ordinary business
hours at the offices of the Company, 350 Fifth Avenue, New York, New York, for a
period of at least ten days prior to the Meeting. A proxy statement, proxy or
proxies, as the case may be, and the Company's 1999 Annual Report to
Stockholders are enclosed herewith.
By order of the Board of Directors,
HAROLD E. BERRITT
Secretary
May 20, 1999
YOUR VOTE IS IMPORTANT
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR
NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE SIGN, DATE AND RETURN THE
ENCLOSED PROXY OR PROXIES, AS THE CASE MAY BE, AS SOON AS POSSIBLE IN THE
ENCLOSED POSTAGE PRE-PAID ENVELOPE.
<PAGE> 3
CLAIRE'S STORES, INC.
3 S.W. 129TH AVENUE
PEMBROKE PINES, FLORIDA 33027
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 17, 1999
------------------------
INTRODUCTION
The accompanying proxy or proxies, as the case may be, are solicited by and
on behalf of the Board of Directors of Claire's Stores, Inc., a Delaware
corporation (the "Company"), in connection with the Annual Meeting of
Stockholders (the "Meeting") to be held in the Regency Room of the Pierre Hotel,
2 East 61st Street, New York, New York, on June 17, 1999 at 9:30 a.m., New York
City time, or at any adjournment or postponement thereof.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Every holder of record of Common Stock, par value $.05 (the "Common
Stock"), and Class A Common Stock, par value $.05 (the "Class A Common Stock"),
of the Company at the close of business on May 7, 1999 (the "Record Date") is
entitled to notice of the Meeting and to vote, in person or by proxy, one vote
for each share of Common Stock and ten votes for each share of Class A Common
Stock, as the case may be, held by such holder. At the Record Date, the Company
had outstanding 48,125,587 shares of Common Stock and 2,882,467 shares of Class
A Common Stock (in each case, excluding treasury shares). The approximate date
on which this proxy statement, accompanying notice and proxy or proxies, as the
case may be, and the Company's 1999 Annual Report to Stockholders (the "Annual
Report"), are first being mailed to stockholders is May 20, 1999.
Each proxy signed and returned by a stockholder may be revoked by the
person giving it at any time before it is voted. Proxies may be revoked by (i)
filing with the Secretary of the Company, at or before the Meeting, a written
notice of revocation relating to the proxy, (ii) duly executing a subsequent
proxy bearing a later date relating to the same shares of Common Stock or Class
A Common Stock, as the case may be, and delivering it to the Secretary of the
Company at or before the Meeting, or (iii) voting in person at the Meeting
(although attendance at the Meeting will not in and of itself constitute a
revocation of a proxy). No such revocation will be effective, however, with
respect to any matter or matters upon which, prior to such revocation, a vote
shall have been cast pursuant to the authority conferred by such proxy.
Abstentions and broker non-votes (shares held in "street name" through a broker
or other nominee as to which voting discretion on a particular matter has not
been received from the beneficial owners and such broker or other nominee is not
permitted to exercise voting discretion on a particular matter) will be counted
for the purpose of determining whether a quorum is present. A quorum of the
stockholders, present in person or by proxy,
<PAGE> 4
consists of holders of the outstanding shares of Common Stock and Class A Common
Stock representing a majority of the number of votes entitled to be cast at the
Meeting.
All proxies received and not revoked will be voted as directed. If no
directions are specified, such proxies will be voted FOR the election of the
Board's nominees. The nominees receiving a plurality of the votes cast by
holders of the outstanding shares of Common Stock (one vote per share) and Class
A Common Stock (ten votes per share), voting together as a single class, will be
elected as directors. An affirmative vote of the majority of votes present at
the Meeting is necessary for approval of any other matters to be considered at
the Meeting. In all cases, neither abstentions nor broker non-votes will be
counted as "for" or "against" a proposal; however, their effect on the outcome
will be the same as a vote "against" a proposal.
The cost of solicitation of proxies will be borne by the Company. In
addition to the use of the mails, some of the directors, officers and regular
employees of the Company may, without additional compensation, solicit proxies
personally or by telephone. The Company will reimburse brokerage houses, banks
and other custodians, nominees and fiduciaries for expenses incurred in
forwarding soliciting material to the beneficial owners of shares of Common
Stock and Class A Common Stock.
2
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning the beneficial
ownership of the Company's Common Stock and Class A Common Stock as of April 15,
1999 by (i) each person known to the Company to beneficially own more than five
percent, (ii) each of the Company's directors and nominees for director, (iii)
each of the Company's Named Executive Officers (as such term is defined in the
Summary Compensation Table below) and (iv) by all directors and executive
officers of the Company as a group. Unless otherwise indicated, each person
possesses sole voting power and investment power with respect to the shares
indicated as beneficially owned, and the business address of each person is c/o
Claire's Stores, Inc., 3 S.W. 129th Avenue, Pembroke Pines, Florida 33027.
<TABLE>
<CAPTION>
COMMON STOCK CLASS A COMMON STOCK
---------------------------- ----------------------------
SHARES SHARES
BENEFICIALLY PERCENT BENEFICIALLY PERCENT
NAME AND ADDRESS OWNED(1) OF CLASS(1) OWNED(1) OF CLASS(1)
- ---------------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Rowland Schaefer(15)....................... 4,213,487(2) 8.8% 1,970,251(3) 68.3%
FMR Corp.(4)............................... 2,840,100 5.9 -- --
82 Devonshire Street
Boston, Massachusetts 02109
Ira D. Kaplan(16).......................... 166,425(5) * -- --
Thomas A. Souza(17)........................ -- -- -- --
c/o Claire's Boutiques, Inc.
2500 West Central Road
Hoffman Estates, Illinois 60195
Sylvia Schaefer(15)........................ 4,213,487(6) 8.8 1,970,251(7) 68.3
Harold E. Berritt(18)...................... -- -- -- --
c/o Greenberg Traurig, P.A.
1221 Brickell Avenue
Miami, Florida 33131
Bruce G. Miller(18)........................ 185,750 * -- --
c/o Ryan Beck & Co.
80 Main Street
West Orange, NJ 07052
Irwin L. Kellner, Ph.D.(18)................ 500 * -- --
c/o Hofstra University
Hempstead, New York 11549
Steven H. Tishman(18)...................... 1,000 * -- --
c/o Bear Stearns & Co., Inc.
245 Park Avenue
New York, New York 10167
E. Bonnie Schaefer(15)..................... 25,000(8) * --(9) --
Marla L. Schaefer(15)...................... 58,125(10) * 5,692(11) *
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
COMMON STOCK CLASS A COMMON STOCK
---------------------------- ----------------------------
SHARES SHARES
BENEFICIALLY PERCENT BENEFICIALLY PERCENT
NAME AND ADDRESS OWNED(1) OF CLASS(1) OWNED(1) OF CLASS(1)
- ---------------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Charles L. Ruffner......................... 1,503,562(12) 3.1 375,889(13) 13.0
c/o Charles L. Ruffner, P.A.
601 Brickell Key Drive
Suite 507
Miami, Florida 33131
All directors and executive officers as a
group (10 persons)....................... 4,650,287(14) 9.7 1,975,943 68.5
</TABLE>
- ---------------
* Less than 1% of the shares outstanding of such class.
(1) The number of shares beneficially owned by each named person is based upon
the numbers reported by such person in documents publicly filed with the
Securities and Exchange Commission ("SEC"), publicly available information
or information available to the Company. The percentage of each class is
calculated based upon the total number of shares of each class outstanding
on April 15, 1999.
(2) Includes 992,537 shares beneficially owned by Mrs. Schaefer. Also includes
18,750 shares subject to currently exercisable options. Does not include
1,503,562 shares held in a trust for the benefit of Mr. Schaefer's children
as to which shares Mr. Schaefer disclaims beneficial ownership.
(3) Includes 1,780,408 shares held in a trust for the benefit of Mr. and Mrs.
Schaefer for which Mr. Schaefer is the trustee, and 189,843 shares held in
a trust for the benefit of Mr. Schaefer's children for which Mrs. Schaefer
is the trustee. Does not include 375,889 shares held in a trust for the
benefit of Mr. Schaefer's children. Mr. Schaefer disclaims beneficial
ownership of all such shares.
(4) Based upon Schedule 13G dated February 1, 1999 filed with the SEC jointly
by FMR Corp., Edward C. Johnson 3d, Abigail P. Johnson, Fidelity Management
& Research Company ("Fidelity") and Fidelity Low-Priced Stock Fund. Mr.
Johnson is chairman and Ms. Johnson is a director of FMR Corp. and may be
deemed to be members of a controlling group with respect to FMR Corp. The
Schedule 13G indicates that at December 31, 1998, (i) Fidelity, a wholly
owned subsidiary of FMR Corp., was the beneficial owner of 2,840,100 shares
of Common Stock in its capacity as an investment adviser to various
registered investment companies (the "Fidelity Funds") (the power to vote
such shares resides solely with the boards of trustees of the Fidelity
Funds, while the power to dispose of such shares resides with Mr. Johnson,
FMR Corp., Fidelity and the Fidelity Funds), and (ii) Fidelity Low-Priced
Stock Fund owns 2,840,100 shares of Common Stock.
(5) Includes 100,500 shares issuable upon the exercise of currently exercisable
stock options and options exercisable within 60 days.
(6) Includes 3,220,950 shares beneficially owned by Mr. Schaefer, but not
1,503,562 shares held in a trust for the benefit of Mrs. Schaefer's
children. Mrs. Schaefer disclaims beneficial ownership as to all such
shares.
(7) Includes 1,780,408 shares held in a trust for the benefit of Mr. and Mrs.
Schaefer for which Mr. Schaefer is the trustee and 189,843 shares held in a
trust for the benefit of Mrs. Schaefer's children for which Mrs. Schaefer
is the trustee. Does not include 375,889 shares held in a trust for the
benefit of Mrs. Schaefer's children as to which shares Mrs. Schaefer
disclaims beneficial ownership.
(8) Represents 25,000 shares subject to currently exercisable stock options and
options exercisable within 60 days. Does not include 501,187 shares held
for the benefit of Ms. Schaefer under the trust referred to
4
<PAGE> 7
in footnotes (2) and (6) to the table, as to which Ms. Schaefer has no
present voting or investment power.
(9) Does not include 163,264 shares held for the benefit of Ms. Schaefer under
the trusts for the benefit of Mrs. Schaefer's children referred to in
footnotes (3) and (7) to the table, as to which Ms. Schaefer has no present
voting or investment power.
(10) Includes 25,000 shares subject to currently exercisable stock options and
options exercisable within 60 days. Does not include 501,187 shares held
for the benefit of Ms. Schaefer under the trust referred to in footnotes
(2) and (6) to the table, as to which Ms. Schaefer has no present voting or
investment power.
(11) Does not include 163,264 shares held for the benefit of Ms. Schaefer under
the trusts for the benefit of Mrs. Schaefer's children referred to in
footnotes (3) and (7) to the table, as to which Ms. Schaefer has no present
voting or investment power.
(12) Represents 1,503,562 shares held in a trust for the benefit of certain of
Mr. and Mrs. Schaefer's children for which Mr. Ruffner is the trustee and
as to which shares he disclaims beneficial ownership.
(13) Represents 375,889 shares held in a trust for the benefit of certain of Mr.
and Mrs. Schaefer's children for which Mr. Ruffner is trustee and as to
which shares he disclaims beneficial ownership.
(14) Includes an aggregate of 169,250 shares issuable upon the exercise of stock
options currently exercisable and exercisable within 60 days.
(15) The named individual is a director and an executive officer of the Company.
(16) The named individual is an executive officer of the Company.
(17) The named individual is an executive officer of the Company's subsidiary,
Claire's Boutiques, Inc. ("Claire's Boutiques").
(18) The named individual is a director of the Company.
NOMINATION AND ELECTION OF DIRECTORS
The By-Laws of the Company provide for a Board of Directors consisting of
not less than three and not more than nine persons as the Board of Directors
from time to time shall decide. At present, the Board of Directors consists of
eight members.
The present term of all directors will expire at the Meeting. Seven
directors are to be elected at the Meeting to serve until the next annual
meeting of stockholders and until their successors are duly elected and
qualified.
The nominees for election as directors by holders of shares of Common Stock
and Class A Common Stock, voting together as a single class, are discussed
below.
It is intended that proxies received will be voted for election of the
nominees named below unless marked to the contrary.
The Board of Directors expects that the nominees named below will be
available for election for a one-year term, but in the event of the refusal or
inability of any such nominee to stand for election, proxies may be voted for
substitute nominees designated by the present Board of Directors.
The Board of Directors recommends that stockholders vote FOR the election
of each of the nominees named below.
5
<PAGE> 8
INFORMATION WITH RESPECT TO NOMINEES
The following table sets forth certain information, as of the Record Date,
with respect to each of the nominees. Each nominee is a citizen of the United
States of America.
<TABLE>
<CAPTION>
DIRECTOR
PRESENT POSITION OF THE
WITH THE COMPANY, PRINCIPAL COMPANY
NAME AGE OCCUPATION AND BUSINESS EXPERIENCE SINCE
- ---- --- --------------------------------------- --------
<S> <C> <C> <C>
Rowland Schaefer....................... 82 President, Chief Executive Officer and 1961
Chairman of the Board of Directors of
the Company
Ira D. Kaplan.......................... 40 Senior Vice President, Chief Financial --
Officer and Treasurer of the Company
Bruce G. Miller........................ 56 Director of the Company; Senior Vice 1983
President, Corporate Finance, of
Ryan, Beck & Co. since July 1992
Irwin L. Kellner, Ph.D................. 60 Director of the Company; Chief 1998
Economist of CBS Marketwatch since
April 1998; President of Kellner
Economic Advisers since March 1997;
Chief Economist of Chase Manhattan's
Regional Bank from January 1996 until
February 1997; Chief Economist of
Chemical Bank from January 1992 until
January 1996; Director of
DataTreasury Corporation and
International Bioimmune Systems
Steven H. Tishman...................... 42 Director of the Company; Senior 1998
Managing Director of the investment
banking division of Bear Stearns &
Co., Inc. since July 1993
Marla L. Schaefer(1)................... 49 Vice Chairman of the Board of Directors 1990
since March 1998; Senior Vice
President of Claire's Boutiques from
April 1998 until April 1999, and
Executive Vice President since then;
Vice President of Fashion
Merchandising of Claire's Boutiques
from April 1990 until April 1998
E. Bonnie Schaefer(1).................. 46 Vice Chairman of the Board of Directors 1998
since January 1999; Vice President --
Real Estate of Claire's Boutiques
from 1994 until April 1999, and
Executive Vice President since then
</TABLE>
- ---------------
(1) Ms. Schaefer is the daughter of Mr. Rowland Schaefer.
6
<PAGE> 9
CERTAIN MATTERS RELATING TO THE COMPANY AND
ITS DIRECTORS AND EXECUTIVE OFFICERS
Board of Directors and Committees
During the Company's last fiscal year, seven meetings of the Board of
Directors were held, and each incumbent director attended 75% or more of the
meetings of the Board held during that period.
The Board of Directors has a standing Audit Committee, which currently
consists of Dr. Kellner and Messrs. Miller and Tishman. The Audit Committee
represents the Board of Directors in its relations with the Company's
independent public accountants and oversees the financial reporting and
disclosures prepared by the Company's management. The Audit Committee also
reviews the scope and results of the examination of the Company's financial
statements by its independent accountants, oversees the adequacy of the
Company's internal accounting controls and reviews and monitors any other
activity that the Committee deems necessary or appropriate. During the year
ended January 30, 1999, the Audit Committee met one time. The Company has no
standing executive, nominating or compensation committees or committees
performing similar functions.
Executive Officers
The following table, together with the accompanying text, presents certain
information regarding all current executive officers of the Company and of
Claire's Boutiques as of the Record Date. Each of the executive officers of the
Company and Claire's Boutiques serves until the election and qualification of
such individual's successor or until such individual's death, resignation or
removal by the Board of Directors of the respective company.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Rowland Schaefer........................... 82 Chairman of the Board, President and Chief
Executive Officer
Thomas A. Souza............................ 40 President and Chief Operating Officer of
Claire's Boutiques
Ira D. Kaplan.............................. 40 Senior Vice President, Chief Financial
Officer and Treasurer
Marla L. Schaefer.......................... 49 Vice Chairman of the Board of Directors
E. Bonnie Schaefer......................... 46 Vice Chairman of the Board of Directors
</TABLE>
Rowland Schaefer has been Chairman of the Board, President and Chief
Executive Officer of the Company since the inception of the Company in 1961.
Thomas A. Souza joined Claire's Boutiques as Senior Vice
President -- Planning and Distribution in October 1998 and was elected President
and Chief Operating Officer of Claire's Boutiques in January 1999. From April
1994 to October 1998, Mr. Souza served in various management positions with The
Sports Authority, Inc., including Vice President of Merchandise, Control,
Planning and Distribution.
Ira D. Kaplan has been Chief Financial Officer of the Company since
September 1990 and Treasurer since September 1987. Mr. Kaplan was elected Senior
Vice President in April 1997.
7
<PAGE> 10
Marla L. Schaefer has been Vice Chairman of the Board of Directors of the
Company since March 1998 and Executive Vice President of Claire's Boutiques
since April 1999. Ms. Schaefer served as Vice President of Fashion Merchandising
of Claire's Boutiques from April 1990 until April 1998, and then as Senior Vice
President from April 1998 until April 1999.
E. Bonnie Schaefer has been Vice Chairman of the Board of Directors of the
Company since January 1999 and Executive Vice President -- Real Estate of
Claire's Boutiques since April 1999. Ms. Schaefer served as Vice
President -- Real Estate of Claire's Boutiques from 1994 until April 1999.
Executive Compensation
The following sets forth information concerning compensation awarded to,
earned by or paid during the three past fiscal years to the Company's Chief
Executive Officer, three other executive officers of the Company and an
executive officer and a former executive officer of Claire's Boutiques whose
compensation exceeded $100,000 for the fiscal year ended January 30, 1999 (other
than the former executive officer, collectively, the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------------------------- ------------------------ ----------
OTHER
ANNUAL RESTRICTED SECURITIES ALL OTHER
FISCAL COMPENSATION STOCK UNDERLYING LTIP COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) (1)($) AWARD(S)($) OPTIONS(#) PAYOUTS($) ($)(2)
- --------------------------- ------ --------- -------- ------------ ----------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Rowland Schaefer........... 1999 1,000,000 0 0 0 0 0 0
Chairman of the 1998 1,000,000 0 0 0 0 0 0
Board, President and 1997 1,000,000 0 0 0 37,500 0 0
Chief Executive Officer
of the Company
Ira D. Kaplan.............. 1999 225,000 60,000 0 0 0 0 3,027
Senior Vice President, 1998 221,757 50,000 0 0 0 0 2,785
Chief Financial 1997 200,000 60,000 0 0 75,000 0 2,250
Officer and Treasurer of
the Company
Marla L. Schaefer(3)....... 1999 256,000 50,000 0 0 0 0 3,267
Vice Chairman of the
Board of Directors of the
Company
E. Bonnie Schaefer(4)...... 1999 182,000 60,000 0 0 0 0 3,163
Vice Chairman of the
Board of Directors of the
Company
Mark A. Hoffman(5)......... 1999 425,317 0 0 0 0 0 3,546
Former President and 1998 284,694 75,000 0 0 0 0 3,200
Chief Operating 1997 276,950 20,000 0 0 150,000 0 2,512
Officer of Claire's
Boutiques
Thomas A. Souza(6)......... 1999 78,077 100,000(7) 0 0 50,000 0 0
President and Chief
Operating Officer of
Claire's Boutiques
</TABLE>
- ---------------
(1) Except as otherwise provided herein, no amounts for executive perquisites
and other personal benefits, securities or property are shown because the
aggregate dollar amount per executive is the lesser of either $50,000 or 10%
of annual salary and bonus.
(2) Consists of matching Company contributions under the Company's 401(k) Profit
Sharing Plan.
(3) Ms. Schaefer was named Vice Chairman of the Board of Directors of the
Company in March 1998.
(4) Ms. Schaefer was named Vice Chairman of the Board of Directors of the
Company in January 1999.
8
<PAGE> 11
(5) Mr. Hoffman's tenure as President and Chief Operating Officer of Claire's
Boutiques ended January 20, 1999.
(6) Effective January 21, 1999, Mr. Souza was appointed President and Chief
Operating Officer of Claire's Boutiques. Prior thereto, he served as Senior
Vice President -- Planning and Distribution of Claire's Boutiques since
October 1998.
(7) Represents a bonus paid in connection with the commencement of Mr. Souza's
employment.
Stock Option Grants
The following table sets forth information concerning the grant of stock
options to the Named Executive Officers during the fiscal year ended January 30,
1999.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------- POTENTIAL REALIZABLE
VALUE
AT ASSUMED ANNUAL
NUMBER OF RATES
SECURITIES % OF TOTAL OF STOCK PRICE
UNDERLYING OPTIONS EXERCISE APPRECIATION
OPTIONS GRANTED TO OR BASE FOR OPTION TERM(2)
GRANTED EMPLOYEES IN PRICE EXPIRATION --------------------
NAME (#)(1) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ---- ---------- ------------ -------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Thomas A. Souza..................... 50,000 11 16.4375 10/5/03 227,069 501,763
</TABLE>
- ---------------
(1) Represents options to purchase shares of Common Stock, which were granted at
fair market value on October 5, 1998. Subject to earlier vesting upon a
change of control (as defined), the options vest and become exercisable in
four equal annual installments commencing on the first anniversary of the
date of grant so long as the employee is employed by the Company or any of
its subsidiaries.
(2) Potential realizable value assumes that the stock price increases from the
date of grant until the end of the option term (5 years) at the annual rate
specified (5% and 10%). The 5% and 10% assumed annual rates of appreciation
are mandated by SEC rules and do not represent the Company's estimate or
projection of the future price of the Common Stock. The Company does not
believe that this method accurately illustrates the potential value of a
stock option.
Option Exercises and Year-End Values
The following table sets forth certain information concerning each exercise
of stock options during the fiscal year ended January 30, 1999 by each of the
Named Executive Officers and the number and value of unexercised options held by
each of the Name Executive Officers on January 30, 1999.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL YEAR-
YEAR END(#) END($)(2)
SHARES ----------------- -----------------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($)(1) UNEXERCISABLE UNEXERCISABLE
- ---- ----------- -------------- ----------------- -----------------------
<S> <C> <C> <C> <C>
Rowland Schaefer.................... 0 NA 18,750/18,750 13,725/13,725
Ira Kaplan.......................... 11,250 113,515.87 94,875/47,625 959,659/157,016
Thomas A. Souza..................... 0 NA 0/50,000 0/165,625
</TABLE>
9
<PAGE> 12
- ---------------
(1) Represents the difference between the exercise price and the fair market
value of the Common Stock on the date of exercise.
(2) Represents the difference between the closing price of the Common Stock on
the New York Stock Exchange on January 29, 1999 ($19.75) and the exercise
price of the options.
Compensation of Directors
Directors of the Company who are not employees (other than Mr. Berritt)
currently receive an annual retainer of $35,000 and are entitled to
reimbursement for out-of-pocket expenses incurred in connection with the
attendance at Board of Directors and committee meetings.
Compensation Committee Interlocks and Insider Participation
The Board of Directors has not established a compensation committee. All
decisions regarding the compensation of executive officers are determined by the
Board of Directors as a whole. All directors participated in deliberations of
the Board of Directors concerning annual performance-based compensation for the
year ended January 30, 1999. Rowland Schaefer, Sylvia Schaefer, Marla L.
Schaefer and E. Bonnie Schaefer are officers and employees of the Company or
Claire's Boutiques. Each management director is asked to excuse himself or
herself from discussions and decisions regarding his or her performance and
compensation. Mr. Berritt is a shareholder of Greenberg Traurig, P.A., a law
firm which has been engaged to perform legal services for the Company in the
past and which may be so engaged in the future. The fees received for such legal
services during the fiscal year ended January 30, 1999 did not exceed five
percent of the law firm's gross revenues for its last full fiscal year.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following Report on Executive Compensation and the performance graph
included elsewhere in this proxy statement do not constitute soliciting material
and should not be deemed filed or incorporated by reference in any other Company
filing under the Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent the Company specifically incorporates this Report or the
performance graph by reference therein.
The Company's executive compensation program is administered by the Board
of Directors and is structured to promote the achievement of the Company's
business goals and, thereby, to maximize corporate performance and stockholder
return. The Company's executive compensation is based primarily upon base
salary, grants of stock options and, to a lesser extent, special achievement
bonuses. The Board of Directors believes that it is important to have stock
incentives constitute a portion of each executive's compensation package in
order to help align executive and stockholder interests. In determining the
total amount and mixture of the compensation package for each executive officer,
the Board of Directors considers the overall value to each executive of his or
her compensation package in light of numerous factors such as (i) competitive
position, (ii) individual performance, including the expected contribution to
the Company's goals of each executive officer, and (iii) the Company's long-term
needs and goals, including attracting and retaining key management personnel.
The overall objectives of this strategy are to attract and retain the best
possible executive talent, to motivate the Company's executives to achieve goals
inherent in the Company's business strategy, to link executive and stockholder
interests and to provide a compensation package that recognizes individual
contributions as well as overall business results.
10
<PAGE> 13
In the final quarter of each fiscal year, the Board of Directors reviews
and approves an annual salary plan for the Company's senior executives for the
succeeding fiscal year. In formulating the plan, key executive positions within
the Company are defined carefully in terms of scope and responsibility, job
complexity, knowledge and experience required, and other relevant factors.
Executive positions are ranked internally on the basis of these criteria, and a
logical value relationship is established among them. The Board also obtains and
analyzes comparative industry, peer group and national compensation surveys. By
reviewing the comparative industry data and other surveys, the Board develops
salary ranges for all senior executive positions in the Company, and agrees upon
each executive's base salary within the range, taking into account certain past
performance factors, including how well objectives contributing to the Company's
success have been met by the executive, how well the executive's
responsibilities have been fulfilled, the executive's growth in qualifications
for the job, the executive's experience and accomplishment of personal goals and
other aspects of performance, and the anticipated future contributions of the
executive.
The Company has also relied upon stock options to reward and incentivize
the performance of executives. The Board of Directors believes that stock
options have been and remain an excellent vehicle for compensating its
employees. Because the option exercise price for the employees generally equals
or exceeds the price of the stock on the date of grant, employees recognize a
gain only if the value of the stock increases. As a result, options effectively
align the interests of executive officers with the Company's stockholders by
tying a significant portion of each executive's total long-term compensation to
the continued growth of the Company and appreciation of its shares. Also, the
stock ownership gives employees a greater personal stake in the Company.
In general, stock options granted to executive officers vest in equal
annual installments over periods of four to nine years commencing on the first
anniversary of the date of grant, so long as the optionee remains employed with
the Company. The size of the individual option grants are generally based upon
competitive practice and the position level of the executive officer.
The compensation paid to Rowland Schaefer, the Company's Chief Executive
Officer, in the fiscal year ended January 30, 1999 is reflected in the table
under "Executive Compensation -- Summary Compensation Table" above. The base
salary paid to Mr. Schaefer during the fiscal year ended January 30, 1999, was
within the salary range developed by the Board of Directors based upon the base
salaries of chief executive officers of comparable companies in the compensation
surveys reviewed by the Board of Directors and took into account Mr. Schaefer's
active role in Company management, the Company's financial performance during
the prior fiscal year and the challenges and expectations for the Company in
fiscal 1999, Mr. Schaefer's stature within the industry as a spokesman for the
Company and his more than 30 years of service as the Company's senior executive
officer. The base salaries of Messrs. Souza and Kaplan have been fixed at levels
which the Board of Directors believes are competitive with amounts paid to
senior executives with comparable qualifications, experience and
responsibilities.
In 1993, Section 162(m) was added to the Internal Revenue Code of 1986, as
amended (the "Code"). This Section generally provides that no publicly held
company shall be permitted to deduct compensation in excess of $1 million paid
in any taxable year to its chief executive officer or any of its four other
highest paid officers unless: (i) the compensation is payable solely on account
of the attainment of performance goals; (ii) the performance goals are
determined by a compensation committee of two or more outside directors; (iii)
the material terms under which compensation is to be paid are disclosed to and
approved by the stockholders of the Company; and (iv) the compensation committee
certifies that the performance goals were met. The effect of the Code Section
162(m) limitation is not applicable to the Company as none of its current
executive officers receive compensation in excess of $1 million.
11
<PAGE> 14
The foregoing information is provided by the Board of Directors of the
Company.
Rowland Schaefer
Marla L. Schaefer
Sylvia Schaefer
E. Bonnie Schaefer
Bruce G. Miller
Harold E. Berritt
Steven H. Tishman
Irwin L. Kellner, Ph.D.
Certain Relationships and Related Transactions
The Company leases from Rowland Schaefer & Associates (formerly Two Centrum
Plaza Associates) approximately 31,000 square feet in Pembroke Pines, Florida,
where it maintains its executive and accounting and finance offices. Rowland
Schaefer & Associates is a general partnership of two corporate general partners
which are owned by immediate family members of the Chairman of the Board and
President of the Company, two of whom, namely Marla L. Schaefer and E. Bonnie
Schaefer, are directors of the Company. The lease provides for the payment by
the Company of annual base rent of approximately $518,000, which is subject to
annual cost-of-living increases, and a proportionate share of all taxes and
operating expenses of the building. The lease expires on July 31, 2000 and may
be extended, at the option of the Company, for an additional five-year term. The
Board of Directors of the Company believes, based upon the report of an
independent committee of the Board, that the terms of the lease are no less
favorable to the Company than those which would be obtained from an independent
third party.
See also "Compensation Committee Interlocks and Insider Participation."
12
<PAGE> 15
Performance Graph
Set forth below is a line graph comparing the cumulative total shareholder
return on the Company's Common Stock with the cumulative total return of
companies on the Standard & Poor's 500 (S&P 500) Stock Index and the Retail
Specialty-Apparel Index for the five fiscal years ended January 30, 1999. This
graph assumes the investment of $100 in the Company's Common Stock, the S&P 500
and the Retail Specialty-Apparel Index on January 31, 1994 and assumes dividends
are reinvested. Measurement points are on the last trading day of each of the
five fiscal years.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG CLAIRE'S STORES, INC., THE S&P 500 INDEX
AND THE RETAIL SPECIALTY-APPAREL INDEX
<TABLE>
<CAPTION>
RETAIL
MEASUREMENT PERIOD CLAIRE'S SPECIALTY-
(FISCAL YEAR COVERED) STORES, INC. S&P 500 APPAREL
<S> <C> <C> <C>
1/94 100.00 100.00 100.00
1/95 76.00 101.00 80.00
1/96 108.00 139.00 95.00
1/97 182.00 176.00 121.00
1/98 228.00 224.00 219.00
1/99 256.00 296.00 372.00
</TABLE>
- ---------------
* $100 invested on 01/31/94 in stock or index--including reinvestment of
dividends, fiscal year ending January 31.
13
<PAGE> 16
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of KPMG Peat Marwick LLP, has been the independent accountants for
the Company since 1993 and will serve in such capacity for the current fiscal
year unless the Board of Directors deems it advisable to make a substitution. It
is expected that one or more representatives of such firm will attend the
Meeting and be available to respond to any appropriate questions. These
representatives will be given an opportunity to make statements at the Meeting
if they so desire.
MISCELLANEOUS
ANNUAL REPORT ON FORM 10-K
The Company has mailed, with this proxy statement, copies of its Annual
Report to holders of shares of Common Stock and Class A Common Stock as of the
Record Date. The Company will provide without charge, to each holder of shares
of Common Stock and Class A Common Stock as of the Record Date, a copy of the
Annual Report on Form 10-K for the fiscal year ended January 30, 1999 as filed
with the SEC on the written request of any such holder addressed to the
Company's Director of Investor Relations at Claire's Stores, Inc., 3 S.W. 129th
Avenue, Pembroke Pines, Florida 33027.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, as well as persons who own more than 10% of a registered
class of the Company's equity securities (the "Reporting Persons"), to file
reports of initial beneficial ownership and changes in beneficial ownership on
Forms 3, 4 and 5 with the SEC and the New York Stock Exchange. Such Reporting
Persons are also required by SEC regulations to furnish the Company with copies
of all such reports that they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and representations that no other reports were
required, during and with respect to the fiscal year ended January 30, 1999, all
Reporting Persons have timely complied with all filing requirements applicable
to them.
STOCKHOLDER PROPOSALS FOR NEXT YEAR'S ANNUAL MEETING
Stockholders interested in presenting a proposal to be considered for
inclusion in the proxy statement for presentation at the 2000 annual meeting of
stockholders may do so by following the procedures prescribed in Rule 14a-8
under the Securities Exchange Act of 1934. To be eligible for inclusion,
stockholder proposals must be received by the Company on or before January 24,
2000.
Stockholders interested in presenting a proposal for consideration at the
2000 annual meeting of stockholders must submit such proposal to the Company,
and such proposal must be received by the Company on or before April 7, 2000. If
a proposal is not submitted by that date, the persons named in the Company's
proxy for the 2000 annual meeting will be allowed to exercise their
discretionary authority to vote upon any such proposal without the matter having
been discussed in the proxy statement for the 2000 annual meeting.
14
<PAGE> 17
OTHER MATTERS
The Board of Directors knows of no other matters which will be presented at
the Meeting. If, however, any other matter is properly presented at the Meeting,
the proxy or proxies, as the case may be, solicited by this proxy statement will
be voted on such matters in accordance with the judgment of the person or
persons holding such proxy or proxies, as the case may be.
By order of the Board of Directors,
Rowland Schaefer
Chairman of the Board and President
May 20, 1999
15
<PAGE> 18
USE ONLY FOR CLASS A COMMON STOCK
CLAIRE'S STORES, INC.
ANNUAL MEETING OF STOCKHOLDERS -- JUNE 17, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, a stockholder of CLAIRE'S STORES, INC. (the "Company"),
hereby revoking any proxy heretofore given, does hereby appoint Messrs. Rowland
Schaefer and Harold E. Berritt, or either of them, proxies with power of
substitution, for and in the name of the undersigned to attend the Annual
Meeting of Stockholders of the Company to be held in the Regency Room of the
Pierre Hotel, 2 East 61st Street, New York, New York, on June 17, 1999 at 9:30
a.m., New York City time, or at any adjournment or postponement thereof, and
there to vote, as designated below, all shares of Class A Common Stock of said
Company which the undersigned would be entitled to vote if personally present at
said meeting, all as described in the Proxy Statement dated May 20, 1999,
receipt of which is hereby acknowledged, as follows:
1. Election of Directors by the holders of the Common Stock and the Class A
Common Stock, voting together as a single class.
[ ] FOR the nominees listed below: [ ] WITHHOLD AUTHORITY to vote for the
nominees listed below:
Rowland Schaefer Ira D. Kaplan Irwin L. Kellner, Ph.D. Steven H. Tishman
Marla L. Schaefer Bruce G. Miller E. Bonnie Schaefer
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
(Continued and to be SIGNED on the OTHER SIDE)
2. In their discretion, said proxies are authorized to vote upon any other
business which may properly come before the Meeting.
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO CONTRARY INSTRUCTION IS
INDICATED, THE VOTE OF THE UNDERSIGNED WILL BE CAST "FOR" THE ELECTION OF
THE NOMINEES FOR DIRECTOR NAMED HEREIN.
DATED: , 1999
----------------------
----------------------------------
SIGNATURE
----------------------------------
SIGNATURE IF HELD JOINTLY
NOTE: Your signature should appear
as your name appears hereon. When
shares are held by joint tenants,
both should sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give
full title as such. If a
corporation, please sign in full
corporate name by the President or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
THE BOARD OF DIRECTORS REQUESTS THAT YOU FILL IN, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
<PAGE> 19
USE ONLY FOR COMMON STOCK
CLAIRE'S STORES, INC.
ANNUAL MEETING OF STOCKHOLDERS -- JUNE 17, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, a stockholder of CLAIRE'S STORES, INC. (the "Company"),
hereby revoking any proxy heretofore given, does hereby appoint Messrs. Rowland
Schaefer and Harold E. Berritt, or either of them, proxies with power of
substitution, for and in the name of the undersigned to attend the Annual
Meeting of Stockholders of the Company to be held in the Regency Room of the
Pierre Hotel, 2 East 61st Street, New York, New York, on June 17, 1999 at 9:30
a.m., New York City time, or at any adjournment or postponement thereof, and
there to vote, as designated below, all shares of Common Stock of said Company
which the undersigned would be entitled to vote if personally present at said
meeting, all as described in the Proxy Statement dated May 20, 1999, receipt of
which is hereby acknowledged, as follows:
1. Election of Directors by the holders of the Common Stock and the Class A
Common Stock, voting together as a single class.
[ ] FOR the nominees listed below: [ ] WITHHOLD AUTHORITY to vote for the
nominees listed below:
Rowland Schaefer Ira D. Kaplan Irwin L. Kellner, Ph.D. Steven H. Tishman
Marla L. Schaefer Bruce G. Miller E. Bonnie Schaefer
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
(Continued and to be SIGNED on the OTHER SIDE)
2. In their discretion, said proxies are authorized to vote upon any other
business which may properly come before the Meeting.
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO CONTRARY INSTRUCTION IS
INDICATED, THE VOTE OF THE UNDERSIGNED WILL BE CAST "FOR" THE ELECTION OF
THE NOMINEES FOR DIRECTOR NAMED HEREIN.
DATED: , 1999
----------------------
----------------------------------
SIGNATURE
----------------------------------
SIGNATURE IF HELD JOINTLY
NOTE: Your signature should appear
as your name appears hereon. When
shares are held by joint tenants,
both should sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give
full title as such. If a
corporation, please sign in full
corporate name by the President or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
THE BOARD OF DIRECTORS REQUESTS THAT YOU FILL IN, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
