UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
(X) Annual Report Pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934
For the Year Ended: January 31, 1999
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 For the transition period from
_____________________ to _______________________
Commission File Number: 333-27813
A. Full title of the plan and address of the plan, if different
from that of the issuer named below:
SAKS INCORPORATED EMPLOYEE STOCK
PURCHASE PLAN
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
Saks Incorporated (formerly Proffitt's, Inc.)
750 Lakeshore Drive
Birmingham AL 35211
SIGNATURES
The Plan. Pursuant to the requirements of the Securities
Exchange Act of 1934 the delegate of the Administrator has duly
caused this annual report to be signed on behalf by the undersigned
hereunto duly authorized.
SAKS INCORPORATED EMPLOYEE STOCK
PURCHASE PLAN
/s/ Douglas E. Coltharp
Date: April 27, 1999 ___________________________________
Douglas E. Coltharp, Executive Vice
President and Chief Financial
Officer
EXHIBIT INDEX
Exhibit
Number Description Page
------------ ---------------- ----
23 Consent of Independent Accountants 6
Saks Incorporated Employee Stock Purchase Plan
Financial Statements
January 31, 1999 and 1998
Saks Incorporated EMPLOYEE STOCK PURCHASE PLAN
TABLE OF CONTENTS
Pages
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Plan Benefits
as of January 31, 1999 and 1998 2
Statements of Changes in Net Assets Available for Plan
Benefits for the years ended January 31, 1999, 1998,
and 1997 3
Notes to Financial Statements 4 - 5
Report of Independent Accountants
To the Board of Directors of Saks Incorporated
In our opinion, the accompanying statements of net assets available
for plan benefits and the related statements of changes in net
assets available for plan benefits, present fairly, in all material
respects, the net assets available for plan benefits of Saks
Incorporated Employee Stock Purchase Plan at January 31, 1999 and
1998, and the related changes in net assets available for plan
benefits for the three years ended January 31, 1999, in conformity
with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these statements based
on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require
that we plan and perform the audits to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
/s/ Pricewaterhouse Coopers LLP
April 19, 1999
Saks Incorporated Employee Stock Purchase Plan
Statements of Net Assets Available for Plan Benefits
January 31, 1999 and 1998
1998 1997
ASSETS
Cash held by Saks Incorporated $4,548 $22,820
-------- --------
1,4548 22,820
-------- --------
LIABILITIES
Due to participants 0 10,614
Due to terminated employees 14,548 12,206
-------- --------
14,548 22,820
-------- --------
Net assets available for plan benefits $ 0 $ 0
======== ========
The accompanying notes are an integral part of these financial
statements.
Saks Incorporated Employee Stock Purchase Plan
Statements of Changes in Net Assets Available for Plan Benefits
for the years ended January 31, 1999, 1998, and 1997
1998 1997 1996
_______ ______ ______
Additions:
Participant contributions $1,803,908 $972,599 $263,458
---------- --------- ---------
Deductions:
Purchase of common stock 1,803,908 961,985 261,545
Excess contributions due to
participants 10,614 1,913
---------- --------- ---------
1,803,908 972,599 263,458
---------- --------- ---------
Net change 0 0 0
Net assets available for plan benefits:
Beginning of year 0 0 0
---------- --------- --------
End of year $0 $0 $0
========== ========= ========
The accompanying notes are an integral part of these financial
statements.
Saks Incorporated Employee Stock Purchase Plan
Notes to Financial Statements
1. Summary of Significant Accounting Policies and Description of
the Plan
The following description of the Saks Incorporated Employee
Stock Purchase Plan (the "Plan") is provided for general
information only. Participants should refer to the Plan
agreement for a more complete description of the Plan's
provisions.
General - The Plan provides employees of Saks Incorporated and
its Subsidiaries (the "Company", formerly Proffitt's, Inc.) an
opportunity to purchase shares of common stock of the Company.
The Plan is intended to qualify as an employee stock purchase
plan under Section 423 of the Internal Revenue Code of 1986,
as amended, and is therefore not subject to Federal and state
income taxes. During the current year, and in connection with
the merger of Proffitt's, Inc. and Saks Holdings, Inc., the
Company changed its corporate name to Saks Incorporated.
Accordingly, the Board of Directors elected to change the name
of the Plan from the Proffitt's, Inc. Employee Stock Purchase
Plan to the Saks Incorporated Employee Stock Purchase Plan.
The total number of shares reserved for issuance under the
Plan is 700,000, which was increased from 350,000 due to the
recent stock split. The number of shares of common stock to be
issued under the Plan and the period for which the option will
remain outstanding (the "Option Period") are based on an
annual determination by the Compensation Committee of the
Company's Board of Directors. Option periods currently end on
January 31 of each year. The price at which the stock may be
purchased is 85% of the lesser of the closing price per share
as listed on the New York Stock Exchange on the last business
day preceding (i) the grant of the option, or (ii) the
exercise of the option. The Plan purchased shares for an
exercise price of $24.97, $15.41 and $18.59 per share for the
years ended January 31, 1999, 1998 and 1997, respectively.
Contributions - Eligible employees may elect annually to make
after-tax contributions to the Plan through payroll
deductions. Contributions are subject to limitations to be set
annually by the Compensation Committee of the Company's Board
of Directors. Each participant's account is credited with the
participant's contributions. Participants are fully vested in
their contributions. The contribution limitation was $2,400
for the years ended January 31, 1999, 1998 and 1997.
Distribution of Stock - As soon as practicable after the
purchase of stock by the Plan for its participants, the
Company will deliver to each participant certificates
representing the shares purchased on their account. In prior
years, amounts remaining in participants' accounts
representing fractional shares were returned to the
participants in cash after completion of the purchase without
interest. Effective January 30, 1998, the Board of Directors
amended the Plan to allow the purchase of fractional shares.
Administrative Expenses - The Company pays for all
administrative expenses of the Plan.
Income Taxes - Participants are not taxed upon receipt or
exercise of options, but rather upon disposition of shares
purchased under the Plan.
Basis of Accounting - The financial statements have been
prepared on the accrual basis of accounting.
2. Plan Termination
Although it has not expressed any intent to do so, the Company
has the right under the Plan to alter, suspend, amend or
terminate the Plan. In the event of plan termination, the
participants' rights to acquire stock would continue until the
end of the current Option Period, at which time shares and
cash due to terminated employees would be distributed and no
further contributions would be accepted.
Consent of Independent Accountants
We consent to the incorporation by reference in the Registration
Statement of Saks Incorporated and Subsidiaries on Form S-8 (File
No. 33-88390) of our report dated April 19, 1999, on our audit of
the financial statements of the Saks Incorporated Employee Stock
Purchase Plan as of January 31, 1999 and 1998 and for the three
years then ended included in this report on Form 11-K.
/s/ PricewaterhousCoopers LLP
Birmingham, Alabama
April 26, 1999
