SCHEDULE 14 INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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Section 240.14a-12
Saks Incorporated
--------------------------
(Name of Registrant as Specified in Its Charter)
Saks Incorporated
---------------------------
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SAKS
INCORPORATED
750 Lakeshore Parkway
Birmingham, Alabama 35211
April 28, 2000
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of the
Shareholders to be held at 8:30 a.m. Central Time on Wednesday,
June 21, 2000, at the Dixon Gallery and Gardens, 4339 Park
Avenue, Memphis, Tennessee 38117.
The notice of the meeting and proxy statement accompanying this
letter describe the specific business to be acted upon. Your vote
is very important. We ask that you vote over the Internet or by
telephone or return your proxy card in the postage-paid envelope
as soon as possible.
After the meeting, there will be a report on the progress of the
Company and an opportunity to ask questions of general interest
to the shareholders.
I hope you will be able to join us, and I look forward to seeing
you.
Sincerely,
/s/ R. Brad Martin
R. Brad Martin
Chairman of the Board and
Chief Executive Officer
SAKS
INCORPORATED
750 Lakeshore Parkway
Birmingham, Alabama 35211
NOTICE OF ANNUAL MEETING OF THE SHAREHOLDERS
To the Shareholders of Saks Incorporated:
Notice is hereby given that the Annual Meeting of the
Shareholders of Saks Incorporated (the "Company") will be held at
8:30 a.m. Central Time on Wednesday, June 21, 2000, at the Dixon
Gallery and Gardens, 4339 Park Avenue, Memphis, Tennessee 38117,
for the following purposes:
1. To elect five Directors to hold office for the terms
specified or until their respective successors have
been elected and qualified;
2. To ratify the appointment of PricewaterhouseCoopers LLP
as the Company's independent accountants for the
current fiscal year ending February 3, 2001;
3. To vote on a shareholder proposal concerning vendor
standards; and
4. To transact such other business as may properly come
before the meeting or any adjournment thereof.
Shareholders of record at the close of business on April 17, 2000
are entitled to notice of, and to vote at, the meeting.
Shareholders are cordially invited to attend the meeting in
person.
By order of the Board of Directors,
/s/ Julia Bentley
Julia Bentley
Secretary
April 28, 2000
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING, YOU ARE
URGED TO VOTE OVER THE INTERNET OR BY TELEPHONE OR TO MARK, SIGN,
AND DATE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE
ENVELOPE PROVIDED. PLEASE SEE THE PROXY CARD FOR PROCEDURES AND
INSTRUCTIONS FOR INTERNET AND TELEPHONE VOTING.
SAKS
INCORPORATED
PROXY STATEMENT
Information Concerning the Solicitation
This proxy statement is furnished in connection with the
solicitation of proxies to be used at the Annual Meeting of the
Shareholders (the "Annual Meeting") of Saks Incorporated (the
"Company"), a Tennessee corporation, to be held on June 21, 2000.
The solicitation of proxies in the enclosed form is made on
behalf of the Board of Directors of the Company. Certain
Directors, officers, and employees of the Company may solicit
proxies by telephone, telecopier, telegram, mail, or personal
contact. In addition, the Company has retained Georgeson
Shareholder Communications, Inc., New York, New York, to assist
with the solicitation of proxies for a fee not to exceed $11,500,
plus reimbursement for out-of-pocket expenses. Arrangements will
be made with brokers, nominees, and fiduciaries to send proxies
and proxy materials at the Company's expense to their principals.
The proxy materials are first being mailed to shareholders on or
about April 28, 2000.
A shareholder voting over the Internet or by telephone or by
signing and returning a proxy on the enclosed form has the power
to revoke it at any time before the shares subject to it are
voted by notifying the Secretary of the Company in writing.
Attendance at the Annual Meeting by a shareholder who has given a
proxy will not have the effect of revoking it unless he or she
gives such written notice of revocation to the Secretary before
the proxy is voted. Votes cast by proxy or in person at the
Annual Meeting will be tabulated by the election inspectors
appointed for the meeting and will determine whether or not a
quorum is present. The election inspectors will treat abstentions
as shares that are present and entitled to vote for purposes of
determining the presence of a quorum. If a broker indicates on
the proxy that it does not have discretionary authority as to
certain shares to vote on a particular matter, those shares will
not be considered as present and entitled to vote with respect to
that matter. The nominees for Director receiving a plurality of
the votes cast at the meeting in person or by proxy shall be
elected. Abstentions and broker non-votes have no affect on the
plurality vote for the election of Directors. All other matters
will be approved if the votes cast favoring the action exceed the
votes opposing the action.
Outstanding Voting Securities
Only shareholders of record at the close of business on April 17,
2000 are entitled to vote at the Annual Meeting. On that day,
there were issued and outstanding 144,436,755 shares of Common
Stock. Each share has one vote.
Listed in the following table are the number of shares owned by
each Director, certain executive officers, and all Directors and
officers of the Company as a group as of March 15, 2000. The
table also includes the beneficial owners as of March 15, 2000
(unless otherwise noted) of more than 5% of the Company's
outstanding Common Stock who are known to the Company.
Name of Beneficial Owner Total Shares Percentage of
(and Address if "Beneficial Beneficially Common Stock
Ownership" Exceeds 5%) Owned (1) Ownership
- --------------------------- ------------ ------------
Directors:
Bernard E. Bernstein 47,602(2) *
Stanton J. Bluestone 340,815 *
John W. Burden, III 24,693 *
Edmond D. Cicala 50,378 *
James A. Coggin 412,768 *
Ronald de Waal 2,993,065 2.10%
Julius W. Erving 26,674 *
Michael S. Gross 20,406 *
Donald E. Hess 697,928(3) *
G. David Hurd 40,074 *
R. Brad Martin 3,112,578(4) 2.18%
Philip B. Miller 848,659 *
Robert M. Mosco 511,632(5) *
C. Warren Neel 31,163 *
Charles J. Philippin 40,494 *
Stephen I. Sadove 27,708 *
Marguerite W. Sallee 15,300 *
Gerald Tsai, Jr. 28,200 *
Named Executive Officers:
Douglas E. Coltharp 215,799 *
Brian J. Martin 212,436 *
All Directors and Officers
as a group (22 persons) 9,998,723 6.89%
Other 5% Owners:
AXA Financial, Inc. 8,168,900(7)(8) 5.75%
1290 Avenue of the Americas
New York, New York
Franklin Mutual Advisors, LLC 7,678,000(6)(8) 5.41%
51 JFK Parkway
Short Hills, New Jersey
Investcorp S.A. 7,630,636(6)(9) 5.37%
Orient Star Holdings LLC 10,020,000(6)(10) 7.06%
SIPCO Limited 7,619,156(6)(11) 5.36%
Southeastern Asset
Management, Inc. 19,460,900(6)(8) 13.70%
6410 Poplar Avenue
Memphis, Tennessee
* Owns less than 1% of the total outstanding Common Stock of
the Company.
(1) Includes shares that the following persons have a right to
acquire within sixty days after March 15, 2000 through the
exercise of stock options: Bernstein (14,200), Bluestone
(332,600), Burden (8,600), Cicala (14,200), Coggin
(235,556), de Waal (20,200), Erving (8,600), Gross (14,200),
Hess (6,000), Hurd (15,140), R. Brad Martin (898,757),
Miller (735,079), Mosco (306,836), Neel (14,200), Philippin
(6,600), Sadove (16,440), Sallee (10,200), Tsai (14,200),
Coltharp (122,237), and Brian J. Martin (126,830).
(2) Includes 6,000 shares owned by the Bernard E. Bernstein
Defined Benefit Pension Plan.
(3) Includes: (i) 327,816 shares owned directly by Mr. Hess,
(ii) 280,842 shares held by Mr. Hess as trustee or
co-trustee for his children, and (iii) 69,176 shares held by
him as trustee for the children of his sister. Does not
include: (i) 4,580 shares owned directly by his wife, (ii)
14,660 shares held by his wife as co-trustee for one of
their children, or (iii) 134,164 shares held by another
individual as trustee for Mr. Hess' children.
(4) Includes: (i) 20,227 shares held by the RBM Family Limited
Partnership, (ii) 2,225 shares owned by RBM Venture Company,
a company of which Mr. Martin is sole shareholder, (iii)
315,769 shares held by Mr. Martin as trustee or co-trustee
for his children, (iv) 8,510 shares owned by the Martin
Family Foundation, (v) 40,000 shares of restricted stock
which will fully vest by October 2, 2001, (vi) 100,000
shares of restricted stock which will fully vest by February
18, 2003, (vii) 200,000 shares of restricted stock, the
restrictions on which lapse based on performance
measurements and length of service, and (viii) 50,000 shares
held in a trust to be settled in accordance with a deferral
agreement.
(5) Excludes 32,564 shares reserved by the Company for issuance
to Mr. Mosco with respect to a deferred compensation
arrangement.
(6) Based solely on information provided by the beneficial
owner.
(7) As reported in the schedule 13G filed with the Securities
and Exchange Commission by AXA Financial, Inc. indicating
ownership as of December 31, 1999 by AXA Financial
affiliates including: Alliance Capital Management L.P.
("Alliance") (7,618,478 shares), Sun Life & Provincial
Holdings (375,700 shares), and The Equitable Life Assurance
Society of the United States ("Equitable") (155,100 shares).
(8) Alliance, Equitable, Franklin Mutual Advisors, LLC, and
Southeastern Asset Management, Inc. (collectively "Advisory
Firms") are investment advisors registered under the
Investment Advisors Act of 1940. Shares are held by one or
more of the Advisory Firms' advisory clients. Pursuant to
investment advisory agreements with their advisory clients,
the Advisory Firms have sole voting and investment power
over the securities owned by the clients that the Advisory
Firms manage. The Advisory Firms have no interest in
dividends or proceeds from the sale of such securities and
disclaim beneficial ownership of all the securities held by
the Advisory Firms' advisory clients.
(9) Investcorp does not directly own any shares of Common Stock.
Beneficial ownership includes 4,625,495 shares owned by
three 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.
(10) Orient Star Holdings LLC, a limited liability company
organized under the laws of Delaware, has as its sole member
Inmobiliaria Carso, S.A. de C.V., a corporation organized
under the laws of Mexico. All of the outstanding voting
equity securities of Inmobiliaria Carso, S.A. de C.V. are
owned by a Mexican trust. The beneficiaries of the trust are
Carlos Slim Helu, Marco Antonio Slim Domit, Patrick Slim
Domit, Maria Soumaya Slim Domit, Vanessa Paola Slim Domit,
and Johanna Monique Slim Domit, each a citizen of Mexico.
The principal business address for each of the foregoing
individuals is Paseo de las Palmas 736, Colonia Lomas de
Chapultepec, Mexico D.F. 11000.
(11) 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 with its
address at P.O. Box 1111, West Wind Building, George Town,
Grand Cayman, Cayman Islands, British West Indies.
ELECTION OF DIRECTORS
(Item No. 1)
The Company's Charter, as amended, provides that the Board of
Directors will be divided into three classes, designated as Class
I, Class II, and Class III. The terms of Class I, II, and III
will expire in 2001, 2002, and 2003, respectively. The Board of
Directors proposes the election of five Directors to Class III.
These five Directors, together with the twelve Directors whose
terms continue beyond this year's Annual Meeting, will comprise
the Board of Directors. Each Director will hold office for the
term specified and until his or her successor is elected and
qualified. Unless otherwise instructed by the shareholder, the
persons named in the enclosed form of proxy intend to vote for
the election of the persons listed in this proxy statement. If
any nominee becomes unavailable for any reason or should a
vacancy occur before the election (which events are not
anticipated), the proxies will be voted for the election of a
substitute nominee to be selected by the persons named in the
proxy. Mr. Edmond D. Cicala and Mr. Charles J. Philippin have
decided to retire from the Board.
We have provided below certain information about the nominees and
Directors. The business association as shown has been continued
for more than five years unless otherwise noted.
Name, Principal Occupation, Director
and Directorship Age Since
- ---------------------------- ----- -------
NOMINEES FOR DIRECTOR
Class III (terms expiring in 2003):
Ronald de Waal 48 1985
Vice Chairman of the Company's Board
of Directors. Chairman of We International,
B.V., a Netherlands corporation, which
operates more than 250 fashion specialty
stores in Belgium, the Netherlands,
Switzerland, Germany, and France.
R. Brad Martin 48 1984
Chief Executive Officer of the Company
since 1989 and Chairman of the Board of
the Company since 1987. Mr. Martin serves
on the Boards of Directors of First
Tennessee National Corporation and
Harrah's Entertainment, Inc.
C. Warren Neel 61 1987
Dean of the College of Business
Administration at the University of
Tennessee, Knoxville. Dr. Neel serves
on the Boards of Directors of American
Healthcorp, Inc., Clayton Homes, Inc.,
O'Charley's, Inc.
Marguerite W. Sallee 54 1996
Chairman and Chief Executive Officer
of Frontline Group, Inc. since July 1999.
Chief Executive Officer of Bright Horizons
Family Solutions from July 1998 to January
1999. Ms. Sallee served as President and
Chief Executive Officer of CorporateFamily
Solutions between February 1987 and July 1998.
Christopher J. Stadler 35 -
Managing Partner of Investcorp, S.A.
since April 1996. From 1995 to April
1996, Mr. Stadler was a Managing Director
at CS First Boston. Mr. Stadler serves
on the Boards of Directors of CSK Auto,
Inc., The William Carter Company, and
Werner Ladder Company.
THE BOARD OF DIRECTORS RECOMMENDS THE SHAREHOLDERS VOTE "FOR" THE
ELECTION AS DIRECTORS OF THE ABOVE LISTED NOMINEES.
Name, Principal Occupation, Director
and Directorship Age Since
- --------------------------- ---- -------
CONTINUING DIRECTORS
Class I (terms expiring in 2001):
Bernard E. Bernstein 69 1987
Partner in the Knoxville, Tennessee
law firm of Bernstein, Stair & McAdams
LLP.
Stanton J. Bluestone 65 1998
Chairman of the Carson Pirie Scott
group of Saks Incorporated from
February 1998 until his retirement
in January 1999. Mr. Bluestone served
as Chairman and Chief Executive Officer
of Carson Pirie Scott & Co. ("Carson's")
between March 1996 and January 1998.
He was the President and Chief Executive
Officer of Carson's between August 1993
and March 1996.
Julius W. Erving 50 1997
President of the Erving Group and
Executive Vice President of the Orlando
Magic since September 1997. Mr. Erving
was employed by the National Broadcasting
Company between December 1994 and
June 1997, and by the National Basketball
Association between 1987 and September 1997.
Mr. Erving serves on the Boards of Directors
of Converse, Inc., The Sports Authority,
and Darden Restaurants, Inc.
Donald E. Hess 51 1996
Chief Executive Officer of Southwood
Partners. Chairman Emeritus of Parisian.
Mr. Hess served as Chairman of the
Parisian group of the Company from April
1997 until his retirement in December
1997 and served as President and
Chief Executive Officer of Parisian from
1986 to April 1997.
Robert M. Mosco 51 1998
President of Merchandising and Chief
Operating Officer of Saks Incorporated
since November 1998. Mr. Mosco served as
President and Chief Executive Officer
of Proffitt's Merchandising Group between
October 1996 and November 1998. Between
February 1996 and October 1996, Mr. Mosco
served as President and Chief Executive
Officer of the Younkers group of the
Company. Mr. Mosco served as President
and Chief Operating Officer of Younkers,
Inc. between 1992 and January 1996.
Stephen I. Sadove 48 1998
President Bristol-Myers Squibb Co.
Worldwide Beauty Care and Nutritionals
since December 1997. Since 1991, Mr.
Sadove has held various executive
positions with Bristol-Myers Squibb,
including President of Clairol, Inc.
Name, Principal Occupation, Director
and Directorship Age Since
- --------------------------- ----- -------
CONTINUING DIRECTORS
Class II (terms expiring in 2002):
John W. Burden, III 63 1998
Retail consultant. Mr. Burden was a
partner in Retail Options between
November 1993 and October 1997. Mr.
Burden is the Retired Chairman of
Federated Department Stores, Inc.
and Allied Stores Corporation. He
serves on the Board of Directors
of Chico's, Inc.
James A. Coggin 58 1998
President and Chief Administrative
Officer of the Company since November
1998. Mr. Coggin served as President
and Chief Operating Officer of the
Company between March 1995 and
November 1998. Prior to that, Mr.
Coggin held various executive
positions with the Company and with
McRae's, Inc.
Michael S. Gross 38 1994
Vice President of Apollo Capital
Management, Inc., the general partner
of Apollo Advisors, L.P. Mr. Gross
serves on the Boards of Directors of
Allied Waste Industries, Inc.,
Converse, Inc., Encompass Services, Inc.,
Florsheim Group, Inc., Rare Medium, Inc.,
and United Rentals, Inc.
G. David Hurd 70 1996
Emeritus Chairman of Principal Financial
Group. Mr. Hurd served as Chairman and
Chief Executive Officer of Principal
Financial Group from 1989 until his
retirement in December 1994.
Philip B. Miller 61 1998
Chairman of the Saks Fifth Avenue
group of the Company since February
2000. Mr. Miller served as Chairman
and Chief Executive Officer of the Saks
Fifth Avenue group of the Company between
September 1998 and January 2000. Mr.
Miller served as Chairman and Chief
Executive Officer of Saks Holdings,
Inc. (the holding company for Saks &
Company, a wholly owned subsidiary that
did business as Saks Fifth Avenue
("SFA")) between March 1996 and
September 1998. He held the same
positions with SFA between June 1993
and September 1998. He joined SFA in
1990. Mr. Miller serves on the Board of
Directors of Kenneth Cole Productions, Inc.
Gerald Tsai, Jr. 71 1993
Private investor. Mr. Tsai served as
Chairman, President, and Chief Executive
Officer of Delta Life Corporation from
February 1993 to October 1997. Mr. Tsai
serves on the Boards of Directors of
Rite Aid Corporation, Sequa Corporation,
Triarc Companies, Inc., United Rentals,
Inc., and Zenith National Insurance
Corporation.
Further Information Concerning Directors
Directors' Fees
Directors who are not officers of the Company each receive an
annual fee of $17,500, $2,000 for attendance at each board
meeting, and $1,000 for attendance at each meeting of a committee
of which he is a member (or $750 for participation by telephone
in a board or committee meeting). Committee chairpersons each
receive an additional annual fee of $2,500. Directors are
reimbursed for expenses in connection with their services as
Directors of the Company. Directors not employed by the Company
may elect to: (i) receive fees earned in Company Common Stock,
(ii) receive one-half of fees earned in Company Common Stock with
the balance in cash, or (iii) participate in the Company's
Deferred Compensation Plan for Non-Employed Directors and defer
all such compensation in lieu of immediate cash payments. The
deferred compensation is tied to the value of the Company's
Common Stock.
Pursuant to the Company's 1994 Long-Term Incentive Plan (the
"1994 Plan") and the 1997 Stock-Based Incentive Plan (the "1997
Plan"), each non-employee Director of the Company annually is
granted a nonqualified stock option to purchase 3,000 shares of
Company Common Stock (8,000 shares for the Company's Vice
Chairman of the Board). Options are priced at fair market value
at the date of grant and vest in one-fifth installments
commencing six months from the date of grant (with each
subsequent installment vesting on the anniversary date of grant)
with full vesting occurring on the fourth anniversary date of
grant. In addition, each non-employee Director has been awarded
2,000 shares of restricted Common Stock which vest in one-tenth
installments commencing on the first anniversary of the award
date. The Company's Vice Chairman of the Board also receives an
annual Common Stock grant of 2,000 shares which vests immediately
upon grant.
Committees of the Board of Directors and Meeting Attendance
The Board met four times during the last fiscal year. The Board
of Directors has established Audit, Human Resources/Option,
Strategic Planning/Corporate Governance, and Executive
Committees. All Committees except the Executive Committee are
comprised of non-employee Directors.
The Audit Committee includes C. Warren Neel (Chairman), Bernard
E. Bernstein, John W. Burden, III, and Charles J. Philippin. The
Committee met four times during the last fiscal year. The Audit
Committee reviews the Company's financial reporting process,
system of internal controls, audit processes, and processes for
monitoring compliance with laws, regulations, and policies.
The Human Resources/Option Committee includes Edmond D. Cicala
(Chairman), Julius W. Erving, Marguerite W. Sallee, and Gerald
Tsai, Jr. The Committee met four times during the last fiscal
year. The Committee: (i) evaluates the performance of the Chief
Executive Officer ("CEO") annually; (ii) reviews and establishes
the salary and incentive compensation, including bonus, stock
options, and stock grants, for the CEO; (iii) reviews and sets
the salaries and incentive compensation for certain senior
corporate officers and executives; (iv) reviews and approves the
incentive compensation programs; (v) reviews and makes decisions
regarding the structure of and awards granted under the Company's
stock option and incentive plans; and (vi) recommends Director
compensation to the Board.
The Strategic Planning/Corporate Governance Committee includes
Ronald de Waal (Chairman), Stanton J. Bluestone, Michael S.
Gross, G. David Hurd, Stephen I. Sadove, and Marguerite W.
Sallee. The Committee met three times during the last fiscal
year. The Committee: (i) reviews the Company's strategic plan
with management and coordinates presentation of the strategic
plan to the full Board; (ii) assesses Board and Committee
effectiveness; (iii) screens and recommends new Director
candidates; and (iv) provides counsel to the Chairman of the
Board on Committee composition. The Committee also considers any
nominees for Director recommended by shareholders.
The Executive Committee includes R. Brad Martin (Chairman),
Edmond D. Cicala, Ronald de Waal, and C. Warren Neel. The
Committee acted by unanimous written consent eight times during
the last fiscal year. The Executive Committee exercises all of
the powers of the full Board of Directors (with certain specified
exceptions required by law) during intervals between full Board
meetings.
Each Director attended 75% or more of the aggregate number of
meetings of the Board of Directors and the committee(s) on which
he or she served, except for Mr. Erving and Mr. Hurd. Mr. Erving
was unable to participate in one regular Board meeting and in two
Committee meetings due to unavoidable business conflicts. Mr.
Hurd was unable to participate in one regular Board meeting due
to a family emergency and in one Committee meeting due to an
unavoidable business conflict. The overall average percentage for
all Directors' meeting attendance was 90%.
Executive Compensation
Summary Compensation Table
The following table sets forth, for the fiscal years ended
January 29, 2000 ("1999"), January 30, 1999 ("1998"), and January
31, 1998 ("1997"), the cash compensation paid by the Company, as
well as other compensation paid or accrued for these years, as to
the Company's Chief Executive Officer and to each of the other
four highest compensated executive officers ("Named Officers").
As used in this Proxy Statement, the term "executive officer" has
the meaning set forth in Rule 3b-7 under the Securities Exchange
Act of 1934. As a consequence, the table is not a list of the
most highly compensated employees of the Company.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
----------------------------------------- --------------------------
All
Other Restricted Securities Other
Annual Stock Underlying Comp-
Name & Salary Bonus Compensation Award(s) Options ensation
Principal Position Year ($) ($)(1) ($) ($) Granted($) ($)
------ ------- ------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
R. Brad Martin 1999 918,750 128,632(2) 57,290 41,486(3)
Chairman of the Board 1998 825,000 1,351,344(4) 137,918(2) 3,211,642(5)(6)(7) 866,341 54,517(3)
and Chief Executive Officer 1997 613,474 1,629,882(8) 134,282(2) 1,223,968 (5)(9) 400,000 19,742(3)
James A. Coggin 1999 737,500 38,890
President and Chief 1998 700,000 252,000 1,525,157(5)(6)(7) 300,000
Administrative Officer 1997 508,667 440,945(8) 587,500(5)(9)
Robert M. Mosco 1999 737,500 38,890
President of Merchandising 1998 700,000 252,000 1,463,827(5)(6)(7) 300,000
and Chief Operating Officer 1997 510,090 300,000 538,532 (5)(9) 50,000(10)
Douglas E. Coltharp 1999 395,000 32,929
Executive Vice President 1998 350,000 105,000 703,023(5)(6)(7) 140,000
and Chief Financial Officer 1997 281,318 134,063 514,063 (5)(9)
Brian J. Martin 1999 387,500 15,560
Executive Vice President of 1998 350,000 105,000 703,023(5)(6)(7) 130,493
Law and General Counsel 1997 250,333 128,500 470,000 (5)(9)
</TABLE>
(1) Amounts awarded under the Company's bonus compensation plans and
arrangements for the respective fiscal years, even if deferred.
(2) In February 1989, the Company entered into a compensation
agreement with R. Brad Martin ("Martin") which provided for a
$500,000 interest-free loan due January 31, 1999 or upon Martin's
termination of employment with the Company. Pursuant to Martin's
amended employment agreement, beginning in 1997, one-fifth of the
loan balance is being forgiven annually. Other Annual
Compensation represents one-fifth of the principal balance being
forgiven and imputed interest on that interest-free loan.
(3) For 1997, represents economic benefit of split dollar life
insurance policy ($9,480) and estate planning services ($10,262).
For 1998, represents economic benefit of split dollar life
insurance policy ($10,860), estate planning services ($17,200),
and usage of Company aircraft ($26,457). For 1999, represents
economic benefit of split dollar life insurance policy ($12,720),
estate planning services ($14,327), and usage of Company aircraft
($14,439). All of these amounts were in accordance with Martin's
employment agreement.
(4) Includes a stock bonus grant to Martin of 39,500 shares of
Company Common Stock. This grant was priced as of March 30, 1999
and was valued at $980,094 (at a market price of $24.8125).
(5) In 1996, Martin, Coggin, Mosco, and Brian Martin were granted
50,000, 30,000, 25,000, and 18,000 shares of Company Common
Stock, respectively, under a Restricted Stock Grant Agreement
pursuant to the Company's 1994 Long-Term Incentive Plan.
Restrictions lapsed as a function of the Company achieving
certain performance goals and time. Shares were earned ("Earned
Shares") on the basis of achieving these goals for 1996, 1997,
and 1998. Restrictions shall be removed from 25% of such Earned
Shares at the time they are earned, and restrictions shall be
removed from an additional 25% of such Earned Shares at the end
of each of the following three years. In late 1996, Coltharp was
granted 15,000 shares of Company Common Stock under a Restricted
Stock Grant Agreement. In 1997, 16,667, 10,000, 8,333, 5,000, and
6,000 shares were earned for Martin, Coggin, Mosco, Coltharp, and
Brian Martin, respectively. As of January 31, 1998, the market
price of the Common Stock was $29.375, and the value of the
shares earned was $489,593, $293,750, $244,782, $146,875, and
$176,250 for Martin, Coggin, Mosco, Coltharp, and Brian Martin,
respectively. In 1998, 16,666, 10,000, 8,334, 5,000, and 6,000
shares were earned for Martin, Coggin, Mosco, Coltharp, and Brian
Martin, respectively. As of January 30, 1999, the market price of
the Common Stock was $36.8125, and the value of the shares earned
was $613,517, $368,125, $306,795, $184,063, and $220,875 for
Martin, Coggin, Mosco, Coltharp, and Brian Martin, respectively.
The value of the Earned Shares is included in total Restricted
Stock Awards, even if not fully vested.
(6) In 1998, Martin, Coggin, Mosco, Coltharp, and Brian Martin were
granted 150,000, 75,000, 75,000, 20,000, and 20,000 shares of
Company Common Stock, respectively, under a Restricted Stock
Grant Agreement pursuant to the Company's 1997 Stock-Based
Incentive Plan. Restrictions lapse as a function of the Company
achieving certain performance goals and time. Shares shall be
earned ("Earned Shares") on the basis of achieving these goals
for 1998, 1999, and 2000. Restrictions shall be removed from 25%
of such Earned Shares at the time they are earned, and
restrictions shall be removed from an additional 25% of such
Earned Shares at the end of each of the following three years. In
1998, 50,000, 25,000, 25,000, 6,667, and 6,667 shares were earned
for Martin, Coggin, Mosco, Coltharp, and Brian Martin,
respectively. As of January 30, 1999, the market price of the
Common Stock was $36.8125, and the value of the shares earned was
$1,840,625, $920,313, $920,313, $245,429, and $245,429 for
Martin, Coggin, Mosco, Coltharp, and Brian Martin, respectively,
as of that date. The value of the Earned Shares is included in
total Restricted Stock Awards, even if not fully vested. In 1999,
no additional shares were earned.
(7) Includes restricted stock awards of 40,000, 12,500, 12,500,
15,000, and 12,500 for Martin, Coggin, Mosco, Coltharp, and Brian
Martin, respectively, which were granted at the market price of
$18.9375 on the October 2, 1998 date of grant (valued at
$757,500, $236,719, $236,719, $284,063, and $236,719 for Martin,
Coggin, Mosco, Coltharp, and Brian Martin, respectively). 25% of
these awards vested on the date of grant, with 100% vesting by
October 2, 2001. The entire value of the award is included, even
if not fully vested.
(8) Includes stock grants to Martin and Coggin of 40,000 and 5,000
shares of Company Common Stock, respectively. These grants were
priced as of January 31, 1998 and were valued at $1,175,000 and
$146,875 for Martin and Coggin, respectively (at a market price
of $29.375).
(9) Includes restricted stock awards of 25,000, 10,000, 10,000,
12,500, and 10,000 shares for Martin, Coggin, Mosco, Coltharp,
and Brian Martin, respectively, which were granted at the market
price of $29.375 on the January 30, 1998 date of grant (valued at
$734,375, $293,750, $293,750, $367,188, and $293,750 for Martin,
Coggin, Mosco, Coltharp, and Brian Martin, respectively). 25% of
these awards vested on the date of grant, with 100% vested by
March 30, 1999.
(10) Relocation reimbursements and bonuses.
Note 1: As of January 29, 2000, the number and value (based on the
$13.6875 closing price of Common Stock as of January 29, 2000) of
shares of unvested restricted stock held by each of the Named Officers
were as follows: Martin, 232,501 shares ($3,182,357); Coggin, 90,000
shares ($1,231,875); Mosco, 87,502 shares ($1,197,684); Coltharp,
37,083 shares ($507,574); and Brian Martin, 36,917 shares ($505,301).
Note 2: All Common Stock amounts reflect the 2-for-1 stock split
effected in October 1997.
Employment Contracts
All of the Named Officers and certain other officers have employment
agreements with the Company. All agreements fix the Named Officers'
minimum base compensation for the fiscal year, set out bonus targets,
and provide for participation by such officers in employment benefit
plans as the Company may adopt. Mr. Martin's contract also sets forth
certain perquisites. The current agreement for Martin expires on March
1, 2005, and the current agreements for Coggin, Mosco, Coltharp, and
Brian Martin expire on March 1, 2003. Annual base salaries currently
in effect are as follows: Martin, $950,000; Coggin, $750,000; Mosco,
$750,000; Coltharp, $410,000; and Brian Martin, $400,000.
Under the terms of each agreement, each Named Officer is entitled to
receive his base salary for the remainder of his employment period in
the event he is terminated without cause. This payment would be made
in one lump sum. If the termination is without cause or by the
executive for Good Reason after a change in control or a potential
change in control, Mr. Martin is entitled to receive (a) a sum equal
to the base Salary then in effect plus 25% of Executives' Maximum
Bonus Potential times the longer of 3 years or the balance of the time
remaining in the Term, and (b) immediate vesting of all stock options
and restricted stock awards (including service grants) with the
ability to exercise the stock options for the shorter of two years or
the original expiration period of the option, and (c) participation in
the Company's health plans, with family coverage, for his life, and
continuation of split-dollar insurance agreements for five years, and
(d) vesting at the retirement rate in the Company's Supplemental
Savings Plan with no reduction in the current rate of return, and (e)
if any payment, right, or benefit paid to Mr. Martin is treated as an
"excess parachute payment " under Section 280 (G) (b) of the Internal
Revenue Code of 1986, as amended (the "Code"), the Company shall
indemnify and hold harmless and make whole, on an after-tax basis, Mr.
Martin for any adverse tax consequences, including but not limited to
providing to Executive on an after-tax basis the amount necessary to
pay any tax imposed by Code Section 4999. Upon Executive's termination
of employment for any reason after a Change in Control, Mr. Martin has
the option to buy any one Company aircraft at its then book value on
the Company's books. If he exercises this option, the Company shall
reimburse him for the operating costs of the aircraft for up to 250
hours per year for three years.
For the other Named Officers, if the termination is without Cause or
by the executive for Good Reason after a Change in Control or
Potential Change in Control, the Named Officer shall receive a sum
equal to three times his Base Salary then in effect, continuation in
the Company's health plans for three years at no cost, and vesting in
the Company's Supplemental Savings Plan at the retirement rate. If any
payment, right or benefit paid to the Named Officer by Company is
treated as an "excess parachute payment" under Section 280 (G) (b) of
the Code, the Company shall indemnify and hold harmless and make
whole, on an after-tax basis, the Named Officer for any adverse tax
consequences, including but not limited to providing to the Named
Officer on an after-tax basis the amount necessary to pay any tax
imposed by Code Section 4999.
A "Change in Control" is defined as: (i) the acquisition of 25% or
more of the combined voting power of the Company's outstanding
securities, (ii) a tender offer, merger, sale of assets, or other
business combination which results in the transfer of a majority of
the combined voting power of the Company or any successor entity, or
(iii) during any period of two consecutive years, the failure to elect
a majority of the individuals constituting the Board of Directors of
the Company prior to the commencement of such period, unless the
election or nomination of any replacement Directors was approved by
vote of at least two-thirds of the Directors of the Company then still
in office who were Directors of the Company at the beginning of such
period. A "Potential Change in Control" is defined as: (i) the
approval by the shareholders of the Company of an agreement which, if
consummated, will result in a change of control or (ii) the
acquisition of 5% or more of the outstanding voting securities of the
Company and the adoption by the Company's Directors of a resolution to
the effect that a potential change in control of the Company has
occurred.
Stock Options
The following table contains information concerning the grant of stock
options under the Company's incentive plans to the Named Officers as
of fiscal year end.
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation for
Individual Grants Option Term (3)
-------------------------------------------- ---------------
% of Exercise
Total Options or
Options Granted to Base Price
Granted Employees In ($/share) Expiration
Name (#)(1) Fiscal Year (2) Date 5%($) 10%($)
- ------------- -------- ---------- -------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
R. Brad Martin 57,290(4) 2.3 28.31 4/30/09 1,020,077 2,585,085
James A. Coggin 38,890(4) 1.5 28.31 4/30/09 692,455 1,754,825
Robert M. Mosco 38,890(4) 1.5 28.31 4/30/09 692,455 1,754,825
Douglas E. Coltharp 17,500(4) 0.7 28.31 4/30/09 311,596 789,649
15,429(5) 0.6 30.00 11/25/06 188,435 439,133
Brian J. Martin 15,560(4) 0.6 28.31 4/30/09 277,053 702,110
</TABLE>
(1) Under the terms of the 1994 Plan and the 1997 Plan, the
Human Resources/Option Committee administers the option
program.
(2) All options were granted at the market closing price on the
date of grant. No incentive stock options were granted. The
exercise price and tax withholding obligations related to
exercise may be paid by delivery of already owned shares,
subject to certain conditions.
(3) Potential gains are reported net of the option exercise
price but before taxes associated with exercise. These
amounts represent certain assumed rates of appreciation
only. Actual gains, if any, on stock option exercises are
dependent on the future performance of the Common Stock of
the Company and overall stock conditions, as well as the
optionholder's continued employment through the vesting
period. The amounts reflected in this table may not
necessarily be achieved.
(4) Options are exercisable in cumulative one-fifth installments
commencing six months from the date of grant (with each
subsequent installment vesting on the anniversary date of
grant) with full vesting occurring on the fourth anniversary
of the date of grant.
(5) Options are fully vested six months from the date of grant.
These options were granted when the Named Officer exercised
previously vested options by tendering shares of Common
Stock that he owned to pay the exercise price and the tax
withholding obligation. The new options equal the amount of
shares used by the Named Officer to pay for those items, and
thus the Human Resources/Option Committee granted the new
options to restore the equity position of the Named Officer.
The Named Officer did not receive cash on the exercise of
these options, but instead received shares equal to the
spread between the exercise price and the fair market value
of the stock on the exercise date. The Committee permitted
this exercise to promote outright ownership of shares of
Company Common Stock, and this method of exercising options
currently is available to other selected senior officers.
Option Exercises and Holdings
The following table sets forth information with respect to the
Named Officers concerning the exercise of options during 1999 and
unexercised options held at fiscal year end.
Aggregated Option Exercises in Last Fiscal Year End and Fiscal
<TABLE>
<CAPTION>
Value of
Unexercised Unexercised
Options In-the-Money
Held at Fiscal Options at Fiscal
Year End (#) Year End ($)(1)
Shares ---------------- ----------------
Acquired on Value Exercisable/ Exercisable/
Name Exercise(#) Realized($) Unexercisable Unexercisable
- -------------- --------- ---------- ------------- -------------
<S> <C> <C> <C> <C>
R. Brad Martin 0 0 787,299/576,332 40,000/0
James A. Coggin 0 0 207,778/211,112 97,500/0
Robert M. Mosco 0 0 259,058/235,112 234,981/28,750
Douglas E. Coltharp 20,192 212,016 110,737/112,000 0/0
Brian J. Martin 0 0 109,718/87,448 56,099/8,625
</TABLE>
(1) Represents the difference between the closing price of the
Company's Common Stock on January 28, 2000 ($13.6875) and
the exercise price of the options.
Comparison of Five-Year Cumulative Total Return
The following graph and table compare total return among Saks
Incorporated, the S&P Midcap 400 Index, and the S&P Retail Stores
- - Department Index, assuming and initial investment of $100 and
reinvestment of dividends.
<TABLE>
Starting Basis
Description 1/28/95 2/3/96 2/1/97 1/31/98 1/30/99 1/28/00
- ----------------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Saks Incorporated $100.00 $99.44 $164.77 $267.05 $334.65 $126.14
S&P Midcap 400 $100.00 $131.47 $160.27 $200.41 $233.86 $271.30
S&P Retail Stores
-Department $100.00 $119.43 $128.31 $168.28 $166.41 $133.62
</TABLE>
These comparisons are not intended to forecast or be indicative
of possible future performance of the Company's stock.
Report of the Human Resources/Option Committee of
the Board of Directors on Executive Compensation
Executive Compensation
The Human Resources/Option Committee of the Board of Directors
(the "Committee") is composed of four independent Directors who
are not employees of the Company: Mr. Cicala, Chairman of the
Committee; Mr. Erving; Ms. Sallee; and Mr. Tsai. The Committee
approves the amount and form of compensation for certain
executive officers of the Company, including the executive
officers named in the Summary Compensation Table. The Committee
reviews the key performance standards of the executive officers
of the Company and measures individual and corporate achievement
of these standards. The Committee conducts an extensive
evaluation of the annual performance of the Chief Executive
Officer ("CEO") and communicates the results of this evaluation
to the other independent Directors and to the CEO.
The compensation programs of the Company are designed to align
compensation with business objectives and performance and to
enable the Company to attract, retain, and reward high-caliber
executives who contribute to the long-term success of the
Company. The Committee believes that executive pay should be
linked to level of responsibility and performance. The executive
compensation philosophy of the Company is to provide base salary
levels comparable to the median ranges of market compensation for
comparable positions, to provide annual cash bonus incentives
which relate to the Company's short-term operating performance,
and to provide substantial equity-based incentives, which relate
to strategic leadership and long-term shareholder value creation.
In summary, the executive compensation policy is primarily based
on performance, with a significant portion of potential
compensation at risk.
For 1999, executive officers were eligible to earn annual cash
bonuses under the 1998 Senior Executive Bonus Plan ("1998 Plan")
based upon the achievement of targeted growth in earnings per
share. No cash bonuses were paid for 1999. For 2000, cash bonuses
may be earned under the 1998 Plan and largely will be based upon
the achievement of targeted sales growth, with governors that
reduce the cash bonus if certain financial targets are not
achieved.
Long-term incentives are provided through awards of stock
options, stock grants, and restricted stock awards (containing
provisions for acceleration of vesting upon achievement of
corporate performance criteria) to the Named Officers and other
key employees pursuant to the Company's 1994 Long-Term Incentive
Plan ("1994 Plan") and the 1997 Stock-Based Incentive Plan ("1997
Plan"). Stock options are granted at or above the prevailing
market value and will only have value if the Company's stock
price increases. Currently, most options vest in five equal
installments, and executives must be employed by the Company at
the time of vesting in order to exercise the option grants. The
Committee administers these plans.
CEO Compensation
R. Brad Martin has served as Chairman and CEO of the Company
since July 1989. While serving in this capacity, the Company's
revenues have grown, from a combination of mergers and
acquisitions and internal growth, from $94.8 million for the year
ended February 3, 1990 ("1989") to over $6.4 billion for the year
ended January 29, 2000 ("1999"). Income (before non-routine
charges) increased from $.8 million in 1989 to $230.1 million in
1999. Shareholders' equity grew from $20.2 million in 1989 to
$2.2 billion at the end of 1999.
Effective May 1, 1999, Mr. Martin entered into an employment
agreement ("Agreement"), approved by the Committee. The terms of
this Agreement provide for an annual base salary of $950,000. The
CEO may earn an annual cash bonus through his participation in
the 1998 Plan. For 1999, the potential cash bonus award was based
solely upon the achievement of earnings per share growth of the
Company. As the Company did not meet its plans for earnings
growth in 1999, Mr. Martin was not awarded a bonus in 1999. For
1999, Mr. Martin's cash compensation totaled $918,750, which was
comprised entirely of base salary.
Pursuant to the terms of the Agreement and the 1998 Plan, the CEO
was also eligible for an annual bonus of up to 40,000 shares of
Company Common Stock. For 1999, the potential to earn 20,000 of
the shares was based upon the achievement of earnings per share
growth rates, and the potential to earn the remaining 20,000 was
based upon the achievement of certain objective financial targets
and objectives in his personal plan. As the Company did not meet
its targeted growth in earnings for 1999, Mr. Martin was not
awarded any shares of Common Stock pursuant to these provisions.
During 1996, the CEO was granted 50,000 restricted shares of
Company Common Stock pursuant to a Restricted Stock Grant
Agreement under the 1994 Plan. Restrictions lapse as a function
of the Company achieving certain performance goals and the
passage of time. Shares were earned ("Earned Shares") on the
basis of achieving those goals for 1996, 1997, and 1998.
Restrictions will be removed from 25% of such Earned Shares at
the time they are earned, and restrictions will be removed from
an additional 25% of such Earned Shares at the end of each of the
following three years. As of January 29, 2000, all of the shares
were earned, with 37,500 vested. The Earned Shares were valued at
$684,375 on January 29, 2000, and the vested shares were valued
at $513,281 on that date.
Effective January 31, 1998, under the 1997 Plan, the Company
entered into a Restricted Stock Grant Agreement with the CEO. The
CEO was granted 150,000 restricted shares of Company Common Stock
under this agreement. Restrictions lapse as a function of the
Company achieving certain performance goals and the passage of
time. Shares shall be earned on the basis of achieving those
goals for 1998, 1999, and 2000. Restrictions will be removed from
25% of such Earned Shares at the time they are earned, and
restrictions will be removed from an additional 25% of such
Earned Shares at the end of each of the following three years.
For the year ended January 30, 1999, 50,000 shares were earned,
and for the year ended January 29, 2000, no additional shares
were earned. As of January 29, 2000, 25,000 shares were vested.
The Earned Shares were valued at $684,375 on January 29, 2000,
and the vested shares were valued at $342,188 on that date.
On April 30, 1999, Mr. Martin was granted the option to purchase
57,290 shares of Company Common Stock under the 1994 Plan. These
options were priced at $28.3125, the market price of the
Company's stock on the date of grant.
Tax Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code (the "Code") limits
the tax deductibility of compensation in excess of $1 million
paid to the Named Officers, unless the payments are made under a
performance-based plan as defined in Section 162(m). The
Committee believes the payments in 1999 under the 1994 Plan and
the 1998 Plan (both of which were previously approved by the
shareholders of the Company) meet the requirements of
deductibility as specified under the applicable provisions of the
Code. While some portion of other compensation may not qualify as
wholly deductible in certain years, any such amount is not
expected to be material to the Company. Awards under the
Restricted Stock Grant Agreements will not qualify as
performance-based compensation under Section 162(m); however,
these agreements qualify for favorable accounting treatment, thus
reducing the program's expense. It is the Committee's intention
to continue to utilize performance-based compensation in order to
obtain maximum deductibility of executive compensation, while
providing a compensation program that will attract, retain, and
reward the executive talent necessary to maximize shareholder
return.
Human Resources/Option Committee
Edmond D. Cicala, Chairman
Julius W. Erving
Marguerite W. Sallee
Gerald Tsai, Jr.
March 31, 2000
Ratification of Appointment of Independent Accountants
(Item No. 2)
Subject to ratification by the shareholders, the Board of
Directors has reappointed PricewaterhouseCoopers LLP as
independent accountants to audit the financial statements of the
Company for the fiscal year ending February 3, 2001.
PricewaterhouseCoopers LLP (or their predecessor firm Coopers &
Lybrand) has examined the financial statements of the Company
since 1991.
Representatives of PricewaterhouseCoopers LLP will be present at
the Annual Meeting and will have an opportunity to make a
statement, if they so desire, and will be available to respond to
appropriate questions.
THE AUDIT COMMITTEE AND THE BOARD OF DIRECTORS RECOMMEND THE
SHAREHOLDERS VOTE "FOR" SUCH RATIFICATION.
Proposal by a Shareholder Concerning Vendor Standards
(Item No. 3)
The following proposal was submitted by a shareholder. If the
shareholder proponent, or a qualified representative, is present
and submits the proposal for a vote, then the proposal will be
voted upon at the Annual Meeting of Shareholders. In accordance
with federal securities regulations, we include the proposal plus
any supporting statement exactly as submitted by the proponent.
To make sure readers can easily distinguish between material
provided by the proponent and material provided by the Company,
we have put a box around material provided by the proponent.
Aaron Merle Epstein, 13455 Ventura Boulevard, #209, Sherman Oaks,
California 91423-6122, owner of 125 shares of the Company's
Common Stock, submitted the following proposal, which is opposed
by the Board of Directors:
Whereas: Consumers and shareholders continue to be seriously
concerned about whether low wages and abusive working
conditions exist in facilities where the products they buy
are produced or assembled.
U.S. based companies are importing more goods from countries
where working conditions fall far below basic standards of
fair and humane treatment. Our company purchases goods
produced in countries like China where human rights abuses
and unfair labor practices have been well documented. (U.S.
State Department's "China Country Report on Human Rights
Practices"1998")
A growing number of students have called on their
universities to adopt codes of conduct to make sure clothing
sold in university stores is made under humane conditions.
Students have pressed for a living wage, upholding the
rights of women in the workplace, public disclosure of
conditions in factories and transparency in reporting, and
verification of compliance by organizations that are
independent of companies. ("Sweatshop Reform," Business
Week, 5/3/99)
Our company should take effective action to ensure it does
not and will not do business with suppliers who manufacture
items for sale using forced labor, convict labor, or illegal
child labor, or who fail to satisfy all applicable standards
and laws protecting their employees' wages, benefits,
working conditions, freedom of association and other rights.
We believe our company needs to support the rights of
workers to organize and bargain collectively any place they
operate. Our company should demonstrate enforcement of its
code by developing independent monitoring programs with
local, respected religious, human rights and labor rights
groups to ensure compliance with its vendor standards and
assure consumers that products are not made under abusive
labor conditions. Reports that overseas suppliers are
exploiting workers may damage our company's reputation and
generate a consumer backlash.
In an effort to improve the quality of life of workers who
make its products, our company should implement ongoing wage
adjustments, ensuring that workers have adequate purchasing
power and a sustainable living wage. Wage adjustments would
add little to overall production costs while contributing to
productivity. In addition, our company, rather than
terminating contracts, needs to establish incentives to
encourage its suppliers and vendors to raise labor
standards.
Resolved: Shareholders request the Board of Directors to
prepare a report at reasonable expense on its Vendor
Standards and compliance mechanisms for its vendors,
subcontractors and buying agents in the countries where it
sources. A summary of the results should be reported to
shareholders by October, 2000.
Supporting Statement
To be effective, enforcement of company codes must be
carefully monitored. The Gap, Inc. has participated in an
independent monitoring process in El Salvador with respected
religious and human rights and labor institutions for the
past four years. Other companies have begun to develop
independent monitoring programs in conjunction with local
non-governmental organizations. Through the use of
independent monitoring, consumers and investors can have
greater confidence that the company's code of vendor conduct
is enforced, protecting the company from negative publicity
associated with the discovery of sweatshop practices.
Statement Against Shareholder Proposal
The Board of Directors opposes the foregoing resolution. The
Company believes that it should obtain appropriate assurances
that the merchandise sold in its stores is manufactured in
accordance with all applicable laws, including those relating to
the rights and welfare of the workers producing the merchandise.
Carson Pirie Scott ("Carson's"), a member of the Saks
Incorporated group, was one of only two department store
retailers named by the Department of Labor to its original Fair
Labor Fashion Trendsetters list for Carson's exemplary efforts to
monitor its vendors and in eradicating sweatshops in the U.S. The
Company's family of companies adopted all relevant policies of
the National Retail Federation ("NRF") relating to the production
of goods in accordance with law and decent living conditions. The
Company has been a member of the NRF's "Hot Goods" task force and
through this membership has monitored areas of concern involving
particular manufacturers and geographic areas.
The Company has adopted for its family of companies a "Code of
Conduct for Saks Incorporated Suppliers." The Code obligates
suppliers to (1) abide by, and only utilize facilities that
comply with, all laws governing the manufacture and supply of
merchandise, including but not limited to local health and
safety, child labor, and wage and hour laws and (2) permit and
facilitate unauthorized inspections and audits by the Company and
its authorized representatives of all facilities utilized to make
merchandise, including workers' living conditions, and of all
books and records relating to the payment of wages. The Company
has retained an independent vendor monitoring organization that
has commenced inspections of several supplier manufacturing
facilities designated by the Company.
The Board of Directors believes that further expenditures of time
and money would be redundant and not in the best interests of the
Company and its shareholders. The Board of Directors believes
that the interests of its shareholders will be best served if the
Company's efforts remain focused on its existing policies and
practices that are designed to enhance compliance by its
suppliers.
ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST"
THIS PROPOSAL.
Section 16(a) of the Securities Exchange Act of 1934
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 10% of the Company's Common Stock to file with the
Securities and Exchange Commission initial reports of ownership
and reports of changes in ownership of stock of the Company.
To the Company's knowledge, based solely on a review of copies of
reports provided by such individuals to the Company and written
representations of such individuals that no other reports were
required, during the fiscal year ended January 29, 2000, all
Section 16(a) filing requirements applicable to its officers,
Directors, and 10% or greater beneficial owners were satisfied.
Other Matters
The Board of Directors of the Company knows of no other matters
that may come before the meeting. However, if any other matters
should properly come before the meeting or any adjournment
thereof, it is the intention of the persons named in the proxy to
vote the proxy in accordance with their best judgment.
Shareholders' Proposals or Nominations for 2001 Annual Meeting
Proposals for shareholder action which eligible shareholders wish
to have included in the Company's proxy mailed to shareholders in
connection with the Company's 2001 Annual Meeting must be
received by the Company at its corporate headquarters, 750
Lakeshore Parkway, Birmingham, Alabama, 35211, by December 29,
2000. Under the Company's bylaws, in order for a matter to be
brought before the 2001 Annual Meeting, or for a shareholder to
nominate persons for election to the Board of Directors at the
2001 Annual Meeting, the shareholder must give the Company notice
at its corporate headquarters by December 29, 2000.
If you wish to make a nomination to the Board, your notice must
include the following information: (a) the name, age, business
address, and residence address of the nominee, (b) the principal
occupation or employment of such person, (c) the number of shares
of Common Stock of the Company that are beneficially owned by
such person, (d) any other information about such person that is
required to be disclosed in solicitations of proxies with respect
to nominees for election as directors pursuant to Regulation 14A
under the Securities Exchange Act of 1934, (e) the name and
address of the shareholder giving notice, (f) the number of
shares of Common Stock that are beneficially owned by such
shareholder, and (g) descriptions of all arrangements or
understandings between the shareholder and each nominee and any
other person pursuant to which the nomination or nominations are
to be made by the shareholder. Nominations by the Board of
Directors of the Company are proper if they are made in
compliance with the proxy rules of the Securities and Exchange
Commission.
If you wish to propose an item of business, your notice must
include the following information: (a) a brief description of the
proposal desired to be brought before the Annual Meeting and the
reasons for conducting such business at the Annual Meeting, (b)
the name and address, as they appear on the Company's books, of
the shareholder proposing such business, (c) the number of shares
of Common Stock of the Company that are beneficially owned by the
shareholder, and (d) any financial interest of the shareholder in
such proposal.
Listing of Shareholders
A complete list of the shareholders entitled to vote at the
Annual Meeting of the Shareholders, to be held on June 21, 2000,
will be available for inspection during normal business hours at
the principal office of the Company for a period of at least 10
days prior to the meeting, upon written request to the Company by
a shareholder, and at all times during the Annual Meeting at the
place of the meeting.
Annual Report
The Company's annual report for the year ended January 29, 2000
is being mailed with this proxy statement but is not to be
considered as a part hereof.
A copy of the Company's annual report on Form 10-K, including the
financial statements and schedules thereto, required to be filed
with the Securities and Exchange Commission, may be obtained
without charge by any shareholder whose proxy is solicited upon
written request to:
Senior Vice President of Investor Relations
Saks Incorporated
P.O. Box 9388
Alcoa, Tennessee 37701-9388
By order of the Board of Directors,
/s/ Julia Bentley
Julia Bentley
Secretary
Birmingham, Alabama
April 28, 2000
SAKS
INCORPORATED
750 Lakeshore Parkway
Birmingham, Alabama 35211
PROXY
PROXY FOR ANNUAL MEETING OF THE SHAREHOLDERS, JUNE 21, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
R. Brad Martin and Julia A. Bentley, or either of them with full
power of substitution, are hereby authorized to represent and
vote all the shares of common stock held of record by the
undersigned on April 17, 2000 at the Annual Meeting of the
Shareholders of Saks Incorporated to be held on June 21, 2000, at
8:30 a.m., Central Time, or any adjournment thereof, with all
powers which the undersigned would possess if personally present,
in the following manner.
(Please sign and date the reverse side of this proxy)
SAKS
INCORPORATED
Instructions for Voting Your Proxy
Saks Incorporated is now offering shareholders of record three
alternative ways of voting your proxies:
*Through the Internet (using a browser)
*By Telephone (using a touch-tone telephone)
*By Mail (traditional method)
Your Internet or telephone vote authorizes the named proxies to
vote your shares in the same manner as if you had returned your
proxy card. We encourage you to use these cost effective and
convenient ways of voting, 24 hours a day, 7 days a week.
Regardless of which method you choose, your proxy will be voted
as directed.
Internet Voting -- Available only until 5:00 p.m. Eastern Time on
June 20, 2000
* Visit our Internet voting website at
http://proxy.georgeson. com
* Enter the Company Number AND Control Number shown below
and follow the instructions on your screen
* You will incur only your usual Internet charges.
Telephone Voting -- Available only until 5:00 p.m. Eastern Time
on June 20, 2000
* This method of voting is available for residents of the
U.S. and Canada
* On a touch-tone telephone, call TOLL FREE 1-877-260-
0406, 24 hours a day, 7 days a week
* You will be asked to enter ONLY the control number
shown below
* Have your proxy card ready, then follow these
instructions:
OPTION 1: To vote as the Board of Directors recommends
on each item, press 1
OPTION 2: If you choose to vote on each director
nominee or each item separately, press 2
VOTING BY MAIL
* Simply mark, sign and date your proxy card and return
it in the postage-paid envelope
* If you are voting by the Internet or telephone, please
do not mail your proxy card.
Our Annual Meeting of the Shareholders will be held at 8:30 a.m.
Central Time on June 21, 2000 at the Dixon Gallery and Gardens,
4339 Park Avenue, Memphis, TN 38117.
COMPANY NUMBER CONTROL NUMBER
TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
- -----------------------------------------------------------------
X Please mark votes as in this example
THIS PROXY SHALL BE VOTED AS DIRECTED. IN THE ABSENCE OF A
CONTRARY DIRECTION, IT SHALL BE VOTED "FOR" ITEMS 1 AND 2
"AGAINST" ITEM 3, AND THE PROXIES MAY VOTE IN THEIR DISCRETION
UPON SUCH OTHER MATTERS AS PROPERLY MAY COME BEFORE THE MEETING
OR ADJOURNMENT THEREOF.
<TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2
<S> <C> <C> <C>
Item 1. Election of Directors: FOR all WITHHOLD
(INSTRUCTION: to withhold authority to vote for nominees AUTHORITY
any individual nominee, strike a line through the listed To vote
nominee's name listed): (Except as for all
CLASS III (term expiring in 2003): Ronald de Waal, marked to nominees
R. Brad Martin, C. Warren Neel, Marguerite W. Sallee, the contrary) listed
Christopher J. Stadler
------- ------
Item 2. PROPOSAL TO RATIFY THE APPOINTMENT OF PRICEWATERHOUSE- FOR AGAINST ABSTAIN
COOPERS LLP as the independent accountants of the
Company ----- ----- -----
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 3
Item 3. PROPOSAL BY A SHAREHOLDER FOR AGAINST ABSTAIN
----- ----- -----
</TABLE>
In their discretion, the Proxies are authorized to vote upon such
other business (none at the time of solicitation of this Proxy)
as may properly come before the meeting or any adjournment
thereof.
The undersigned acknowledges receipt of Notice of said Annual
Meeting and hereby revokes all proxies heretofore given by the
undersigned for said Annual Meeting.
THIS PROXY MAY BE REVOKED AT ANY TIME PRIOR TO VOTING THEREOF.
DATE: ____________________, 2000
_________________________________
Signature of Shareholder
_________________________________
(Signature of Shareholder (if held jointly))
PLEASE DATE THIS PROXY AND SIGN YOUR NAME OR NAMES EXACTLY AS
SHOWN HEREON. WHEN SIGNING, AS AN ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE SIGN YOUR FULL TITLE
AS SUCH. IF THERE ARE MORE THAN ONE TRUSTEE, OR JOINT OWNERS,
ALL MUST SIGN. PLEASE RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
