<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 [X]
Filed by a Party other than Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
Commission Only (as Permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
VANS, 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
[VANS LOGO]
15700 SHOEMAKER AVENUE
SANTA FE SPRINGS, CALIFORNIA 90670
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 26, 1999
Dear Stockholders:
The 1999 Annual Meeting of Stockholders of Vans, Inc., a Delaware
corporation (the "Company"), will be held on Tuesday, October 26, 1999, at 10:00
a.m., Pacific Time, at the Vans Skatepark located at The Block, 20 City
Boulevard West, Orange, California, for the following purposes:
1. To elect 10 directors to serve for the ensuing year and until their
successors are duly elected and qualified;
2. To consider an amendment to the Company's 1991 Long-Term Incentive Plan
to increase the number of shares available for issuance by 300,000;
3. To ratify the appointment of KPMG LLP as the Company's independent
auditors for fiscal 2000; and
4. To transact such other business as may be properly brought before the
Annual Meeting or any adjournment thereof.
In accordance with the Company's Restated By-Laws, the Board of Directors
has fixed the close of business on August 26, 1999, as the record date for the
purpose of determining stockholders entitled to receive notice of and to vote at
the Annual Meeting or any adjournment or adjournments thereof. The stock
transfer books will not be closed.
A list of the stockholders entitled to vote at the Annual Meeting may be
examined at the Company's executive offices, located at 15700 Shoemaker Avenue,
Santa Fe Springs, California, during the 10-day period preceding the Annual
Meeting.
YOUR VOTE IS VERY IMPORTANT. Therefore, whether or not you plan to attend
the Annual Meeting in person, please sign and return the enclosed proxy in the
envelope provided. If you attend the Annual Meeting and desire to vote in
person, you may do so even though you have previously sent a proxy.
By Order of the Board of Directors,
/s/ CRAIG E. GOSSELIN
Craig E. Gosselin
Vice President, General Counsel,
and Corporate Secretary
September 20, 1999
Santa Fe Springs, California
<PAGE> 3
[VANS LOGO]
15700 SHOEMAKER AVENUE
SANTA FE SPRINGS, CALIFORNIA 90670
------------------------
PROXY STATEMENT
------------------------
INFORMATION RELATING TO VOTING AT THE ANNUAL MEETING
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Vans, Inc., a Delaware corporation (the
"Company"), for use at the Annual Meeting of Stockholders (the "Annual Meeting")
of the Company to be held on Tuesday, October 26, 1999, and at any adjournment
thereof. The approximate date of mailing of this Proxy Statement and the
accompanying proxy card is September 20, 1999.
The Board of Directors of the Company has selected August 26, 1999, as the
record date for the Annual Meeting. Only those stockholders of record at the
close of business on that date will be entitled to notice of and to vote at the
Annual Meeting. The Company had a total of 13,498,253 shares of $.001 par value
common stock (the "Common Stock") outstanding at August 26, 1999. The Common
Stock is the only outstanding class of voting securities of the Company.
Stockholders will be entitled to one vote for each share of stock held by them
of record at the close of business on the record date on any matter that may be
presented for consideration and action by the stockholders at the Annual
Meeting. Stockholders are not entitled to cumulate their votes and have no
rights of appraisal with respect to the proposals described herein.
All valid proxies received in response to this solicitation will be voted
in accordance with the instructions indicated thereon by the stockholders giving
such proxies. If no contrary instructions are given, proxies received will be
voted in favor of the election of the director nominees named in this Proxy
Statement and in favor of the other proposals described herein. Proxies
solicited hereby may be voted for adjournment of the Annual Meeting (whether or
not a quorum is present for the transaction of business) in order to permit
further solicitation of proxies if the Board of Directors of the Company
determines that such adjournment would be advisable in order to obtain
sufficient votes for approval of the matters to be voted upon at the Annual
Meeting.
The Board of Directors does not know of any other business to be presented
for action at the Annual Meeting. If any other business is properly presented at
the Annual Meeting and may properly be voted upon, the proxies solicited hereby
will be voted on such matters in accordance with the best judgment of the proxy
holders named in such proxies. A stockholder's proxy may be revoked at any time
before it is voted at the Annual Meeting by giving written notice of such
revocation to the Corporate Secretary of the Company (which notice may be given
by the filing of a duly executed proxy bearing a later date) or by attending the
Annual Meeting and voting in person.
The costs of this proxy solicitation will be paid by the Company. To the
extent necessary, proxies may also be solicited by personnel of the Company in
person, by telephone, or through other forms of communication. Company personnel
who participate in this solicitation will not receive any additional
compensation for such solicitation. The Company will request record holders of
shares beneficially owned by others to forward this Proxy Statement and related
materials to the beneficial owners of such shares and will reimburse such record
holders for their reasonable expenses incurred in doing so.
<PAGE> 4
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of September 1, 1999: (i) by each
person who is known by the Company to own beneficially more than 5% of the
Company's Common Stock; (ii) by each director and director nominee; (iii) by the
executive officers named in the Summary Compensation Table set forth under the
caption "Executive Compensation and Other Information" (except Sari K. Ratsula
who has left the Company); and (iv) by all directors and executive officers of
the Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT
NAME OWNERSHIP(1) OF CLASS
---- ----------------- --------
<S> <C> <C>
Mellon Bank Corporation..................................... 1,286,375(2) 9.5%
One Mellon Bank Center
Pittsburgh, PA 15258
Neumeier Investment Counsel LLC............................. 1,006,800(2) 7.5%
26435 Carmel Rancho Blvd.
Carmel, CA 93923
FMR Corp.................................................... 892,500(2) 6.6%
82 Devonshire Street
Boston, MA 02109
Dimensional Fund Advisors Inc............................... 680,900(2) 5.0%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
Walter E. Schoenfeld........................................ 285,353(3) 2.1%
Gary H. Schoenfeld.......................................... 255,492(4) 1.9%
George E. McCown............................................ 101,043 *
Philip H. Schaff, Jr.**..................................... 126,572(5) *
Wilbur J. Fix............................................... 65,333(6) *
James R. Sulat.............................................. 22,501(7) *
Kathleen M. Gardarian....................................... 20,168(8) *
Lisa M. Douglas............................................. 17,501(9) *
Gerald Grinstein............................................ 4,167(10) *
Charles G. Armstrong........................................ 9,167(11) *
Leonard R. Wilkens.......................................... 5,367(12) *
Neal R. Lyons............................................... 47,802(13) *
Craig E. Gosselin........................................... 44,669(14) *
All directors and executive officers as a group (22
persons).................................................. 1,079,108(15) 8.0%
</TABLE>
- ---------------
* Represents beneficial ownership of less than 1%.
** Mr. Schaff is not standing for re-election to the Board of Directors.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission (the "Commission") and generally
includes voting or investment power with respect to securities. Except as
indicated by footnote, and subject to community property laws where
applicable, the persons named in the table above have sole voting and
investment power with respect to all shares of Common Stock shown as
beneficially owned by them. Percentage of beneficial ownership is based on
shares of Common Stock outstanding as of September 1, 1999, plus shares
deemed outstanding pursuant to Rule 13d - 2(d)(1) under the Securities
Exchange Act of 1934, as amended.
(2) Based on Schedule 13G filings, and amendments thereto, made by such
stockholders for the year ended December 31, 1998.
(3) Includes 169,212 shares of Common Stock that are subject to stock options
which are exercisable within 60 days of September 1, 1999.
(4) Includes 199,206 shares of Common Stock that are subject to incentive stock
options which are exercisable within 60 days of September 1, 1999. Excludes
213,332 shares of Common Stock that are subject to the same stock options
which are not exercisable within 60 days of September 1, 1999.
(5) Includes 68,180 shares of Common Stock that are subject to non-statutory
stock options which are exercisable within 60 days of September 1, 1999.
2
<PAGE> 5
(footnotes from previous page continued)
(6) Includes 51,333 shares of Common Stock that are subject to non-statutory
stock options which are exercisable within 60 days of September 1, 1999.
Excludes 3,333 shares of Common Stock that are subject to the same
non-statutory stock options which are not exercisable within 60 days of
September 1, 1999.
(7) Represents shares of Common Stock that are subject to non-statutory stock
options which are exercisable within 60 days of September 1, 1999. Excludes
4,999 shares of Common Stock that are subject to the same non-statutory
stock options which are not exercisable within 60 days of September 1,
1999.
(8) Includes 19,168 shares of Common Stock that are subject to non-statutory
stock options which are exercisable within 60 days of September 1, 1999.
Excludes 4,999 shares of Common Stock that are subject to the same
non-statutory options which are not exercisable within 60 days of September
1, 1999.
(9) Represents shares of Common Stock that are subject to non-statutory options
which are exercisable within 60 days of September 1, 1999. Excludes 4,999
shares of Common Stock that are subject to the same non-statutory stock
options which are not exercisable within 60 days of September 1, 1999.
(10) Represents shares of Common Stock that are subject to non-statutory options
which are exercisable within 60 days of September 1, 1999. Excludes 8,333
shares of Common Stock that are subject to the same non-statutory stock
options which are not exercisable within 60 days of September 1, 1999.
(11) Includes 4,167 shares of Common Stock that are subject to non-statutory
stock options which are exercisable within 60 days of September 1, 1999.
Excludes 8,333 shares of Common stock that we subject to the same
non-statutory stock options which are not exercisable within 60 days of
September 1, 1999.
(12) Includes 4,167 shares of Common Stock that are subject to incentive stock
options which are exercisable within 60 days of September 1, 1999. Excludes
8,333 shares of Common Stock that are subject to the same options which are
not exercisable within 60 days of September 1, 1999.
(13) Includes 37,873 shares that are subject to incentive stock options which
are exercisable within 60 days of September 1, 1999. Excludes 34,633 shares
of Common Stock that are subject to the same options which are not
exercisable within 60 days of September 1, 1999.
(14) Includes 39,396 shares of Common Stock that are subject to incentive stock
options which are exercisable within 60 days of September 1, 1999. Excludes
10,660 shares of Common Stock that are subject to the same options which
are not exercisable within 60 days of September 1, 1999.
(15) Includes 769,236 shares that are subject to non-statutory and incentive
stock options which are exercisable within 60 days of September 1, 1999 and
are held by the executive officers and directors of the Company.
PROPOSAL 1
ELECTION OF DIRECTORS
The Restated By-laws of the Company, as amended, provide for no less than
five and no more than 11 directors, as determined from time to time by the
Board. The Board has fixed the number of directors at 11 until the end of Philip
H. Schaff's tenure as a director in October. It is currently anticipated that
the number of directors will be fixed at 10 at that time. The Restated By-laws
currently provide that the directors shall be elected annually.
Set forth below are the names of the persons nominated by the Board of
Directors for election as directors at the Annual Meeting, together with their
ages, principal occupations and business experience during the last five years,
present directorships and the year each first became a director of the Company.
All of the nominees are presently directors. If any nominees are unable to serve
as a director, the person or persons voting the proxies solicited hereby will
select another nominee in his or her place. The Company has no reason to believe
that any of the nominees will be unable or unwilling to serve if elected. The
vote of a plurality of the total votes
3
<PAGE> 6
cast in person or by proxy at the Annual Meeting is required to elect each of
the nominees. Pursuant to the Restated By-laws, abstentions and broker non-votes
will not be deemed votes cast.
<TABLE>
<CAPTION>
FIRST
BECAME
NOMINEES FOR ELECTION AGE POSITION HELD IN THE COMPANY A DIRECTOR
--------------------- --- ---------------------------- ----------
<S> <C> <C> <C>
Walter E. Schoenfeld................... 68 Director and Chairman of the Board 1991
Gary H. Schoenfeld..................... 36 Director; President and Chief Executive 1995
Officer
Charles G. Armstrong................... 57 Director 1998
Lisa M. Douglas........................ 40 Director 1995
Wilbur J. Fix.......................... 72 Director 1993
Kathleen M. Gardarian.................. 54 Director 1994
Gerald Grinstein....................... 67 Director 1998
George E. McCown....................... 64 Director and Vice Chairman of the Board 1988
James R. Sulat......................... 49 Director 1994
Leonard R. Wilkens..................... 62 Director 1998
</TABLE>
WALTER E. SCHOENFELD has served as a director since August 1991 and has
served as Chairman of the Board since July 1996. He served as Chief Executive
Officer from May 1995 to February 1997 and was President from May 1995 to July
1996. He previously held the positions of President and Chief Executive Officer
from July 1993 to September 1994. From April 1993 to July 1993, he served as
Acting President and Chief Executive Officer. Mr. Schoenfeld was a Vice Chairman
of the Board from March 1993 to July 1996. Mr. Schoenfeld has served as Chairman
of the Board of Schoenfeld Group Ltd., a private consulting and investment
company, since 1987, and was Chairman of the Board of Access Long Distance
Telephone Company from 1991 to January 1998. From 1976 to 1982 he was a General
and Limited Partner of the Seattle Mariners Baseball Club. Mr. Schoenfeld is the
father of Gary H. Schoenfeld, a director and President and the Chief Executive
Officer of the Company. Mr. Schoenfeld received a B.B.A. from the University of
Washington.
GARY H. SCHOENFELD has served as a director since November 1995. He became
President in July 1996 and Chief Executive Officer in February 1997. He served
as the Company's Chief Operating Officer from September 1995 to February 1997.
Prior to joining the Company, Mr. Schoenfeld was a partner of McCown De Leeuw &
Co., a venture banking firm ("MDC"). During his employment with MDC from July
1988 to August 1995, Mr. Schoenfeld was a director of five MDC-affiliated
companies, and has been involved with the Company since 1989. Prior to joining
MDC, Mr. Schoenfeld was employed for two years by David H. Murdock, a private
financier, and was previously involved in a variety of projects with Brittania
Sportswear Company, including offshore sourcing operations in Hong Kong. Mr.
Schoenfeld is a director of Fitness Holdings, Inc., an MDC portfolio company.
Mr. Schoenfeld is the son of Walter E. Schoenfeld, the Company's Chairman of the
Board. Mr. Schoenfeld received a B.A. from the University of California at Los
Angeles and an M.B.A. from Stanford University.
CHARLES G. ARMSTRONG has served as a director since September 1998. Mr.
Armstrong has been the President and Chief Operating Officer of the Seattle
Mariners Baseball Club since July 1992. He was President of the Mariners from
1983 to 1989, and was Interim Athletic Director for the University of Washington
in 1991. During his involvement with Major League Baseball, Mr. Armstrong has
served on a number of committees for the American League and the Major League
Baseball Commissioner's Office; he currently serves on the International
Committee. Mr. Armstrong received a B.S. in Industrial Engineering from Purdue
University, and a J.D. from Stanford University Law School.
LISA M. DOUGLAS has served as a director since November 1995. Ms. Douglas
is President of Nufitness Corporation, a producer of fitness-related television,
audio, visual aids and wellness programs. Prior to founding Nufitness in 1991,
Ms. Douglas was Director of Corporate Sales for Koala Blue, a women's sportswear
manufacturer. Ms. Douglas currently serves on the Board of the Douglas Family
Foundation, and formerly served as a member of the Board and the Steering
Committee of the Associates of Cedars-Sinai
4
<PAGE> 7
Medical Center. Ms. Douglas received a B.S. from the University of Minnesota and
a Masters in Psychology from California State University, Northridge.
WILBUR J. FIX has served as a director of the Company since February 1993.
From 1980 to 1993, Mr. Fix was Chairman of the Board and Chief Executive Officer
of The Bon Marche, a Seattle-based chain of department stores which was acquired
by Campeau Corporation in 1986. Mr. Fix ultimately became Senior Vice President
of Allied Stores Corporation, the parent company of The Bon Marche, and a member
of the Boards of Directors of Allied Stores and Federated Stores. Mr. Fix is a
member of the Board of Directors of Building Materials Holding Corporation, a
publicly traded corporation. Mr. Fix received a B.A. from the University of
Washington.
KATHLEEN M. GARDARIAN has served as a director of the Company since
December 1994. She is the founder and Chief Executive Officer of Qualis
International, Inc., an Irvine, California-based sales and distribution company.
Ms. Gardarian is a founding Trustee and Board member of the World Business
Academy, and serves on the Boards of the State of the World Forum, the Woman and
Public Policy Program at the JFK School of Government of Harvard University, and
The Institute of Transpersonal Psychology. Ms. Gardarian received a B.A. from
the University of California at Los Angeles.
GERALD GRINSTEIN has served as a director since June 1998. Mr. Grinstein
has been non-executive Chairman of the Board of Delta Airlines since August
1997, non-executive Chairman of the Board of Agilent Technologies since August
1999, and serves on the Boards of PACCAR, Inc., Imperial Sugar Corporation and
The Pittson Company. He is a principle of Madrona Investment Group, LLC. From
1991 to 1995, he was Chairman and Chief Executive Officer of Burlington Northern
Inc. and Burlington Northern Railroad Company, where he oversaw the acquisition
of Santa Fe Pacific Corp. He is a Trustee of the Henry M. Jackson Foundation and
is a graduate of Yale College and Harvard Law School.
GEORGE E. MCCOWN has served as Vice Chairman of the Board since July 1996.
From February 1988 to July 1996, he was Chairman of the Board. From February
until July 1988, he served as President/Chief Executive Officer. Mr. McCown was
co-founder and has been a managing general partner of MDC Management Company,
the general partner of MDC, since 1984. He also serves as Chairman of the Board
and a director of Building Materials Holding Corporation, a publicly traded
corporation, and is a director of FiberMark, Inc., a publicly traded
corporation, and several other MDC portfolio companies. He serves as Chairman of
the World Business Academy and is an Observor of the Hoover Institution on War,
Revolution and Peace, and is involved with a number of other charitable and
non-profit organizations. Mr. McCown received a B.S. from Stanford University,
where he served as a Trustee, and an M.B.A. from Harvard University.
JAMES R. SULAT has served as a director of the Company since October 1994.
He became Chief Financial Officer of Chiron Corporation, a manufacturer and
marketer of healthcare products for the treatment, prevention and diagnosis of
disease, in April 1998. Prior to joining Chiron, Mr. Sulat was Chief Financial
Officer of Stanford Health Services, a not-for-profit health care provider which
operates the Stanford University hospital and clinic from 1993 to March 1998.
Mr. Sulat received a B.S. from Yale University and an M.B.A. and M.S. from
Stanford University.
LEONARD R. WILKENS has served as a director since September 1998. Mr.
Wilkens has been head coach of the Atlanta Hawks basketball team since 1994, and
was previously head coach of the Cleveland Cavaliers. Mr. Wilkens has coached in
the National Basketball Association for 26 years and is the winningest coach in
the history of the NBA. He also served as coach of the Dream Team of the 1996
Atlanta Olympic Games. He formerly served as Vice President of the NBA Players
Association and is currently President of the NBA Coaches Association. Mr.
Wilkens has been elected to the NBA Hall of Fame as both player and coach. He is
a graduate of Providence College with a Degree in Economics and has an Honorary
Doctorate in Humanities from both Providence College and Seattle University. Mr.
Wilkens serves on the Board of Trustees of Providence College and also serves on
the Board of the Atlanta Center for Children and the Odessa Biorn Children's
Clinic.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU
VOTE FOR THE ABOVE NOMINEES TO THE BOARD.
5
<PAGE> 8
Board Committees. The Board of Directors has a Compensation Committee,
which makes recommendations concerning salaries and incentive compensation for
officers and employees of the Company; an Audit Committee, which reviews the
results and scope of the audit and other services provided by the Company's
independent auditors, and determines the Company's investment policies; an
Executive Committee, which reviews the operations of the Company on a periodic
basis; a Mergers and Acquisitions Committee, which considers appropriate
acquisitions for the Company; and a Nominating Committee, which considers and
recommends appropriate candidates for the Board. The Nominating Committee does
not, at this time, consider nominees for the Board recommended by stockholders.
The members of the Compensation Committee are Wilbur J. Fix, Chairman,
Philip H. Schaff, Jr. (who is not standing for re-election to the Board), Lisa
M. Douglas, Kathleen M. Gardarian, and Leonard R. Wilkens. The Compensation
Committee met, or acted pursuant to Written Consent, eight times during fiscal
1999. The members of the Audit Committee are James R. Sulat, Chairman, Charles
G. Armstrong, and Wilbur J. Fix. The Audit Committee met six times during fiscal
1999. The members of the Executive Committee are George E. McCown, Chairman,
Walter E. Schoenfeld, Vice Chairman, and Gary H. Schoenfeld. The Executive
Committee met three times during fiscal 1999. The members of the Mergers and
Acquisitions Committee are Walter E. Schoenfeld, Chairman, Gerald Grinstein, and
Gary H. Schoenfeld. The Mergers and Acquisitions Committee met one time during
fiscal 1999. The members of the Nominating Committee are Walter E. Schoenfeld,
Chairman, Lisa M. Douglas, and Gary H. Schoenfeld. The Nominating Committee did
not meet during fiscal 1999.
Compensation of Directors. It is the Company's policy to pay its outside
directors (who are currently Mesdames Gardarian and Douglas and Messrs. Schaff,
Fix, Sulat, Grinstein, Armstrong and Wilkens) a quarterly fee of $3,000 plus a
fee of $2,000 for in-person Board and Committee meetings and $1,000 for
telephonic Board and Committee meetings, as compensation for their services. All
directors are reimbursed for expenses incurred in connection with attendance at
Board and Committee meetings and receive an initial grant of a non-statutory
stock option to purchase 7,500 shares upon joining the Board and annual grants
of non-statutory stock options to purchase 5,000 shares on the date of each
Annual Meeting of Stockholders.
Meetings of the Board of Directors. During fiscal 1999, there were 10
regularly scheduled and special meetings of the Board of Directors of the
Company. The Board also acted pursuant to Written Consent one time during fiscal
1999. Each nominee for the Board attended at least 75% of the aggregate of (i)
the total number of Board meetings, and (ii) the total number of meetings held
by all Committees on which he or she served during fiscal 1999.
Board Members who are leaving the Company. Philip H. Schaff, Jr. has
declined to stand for re-election to the Board.
Information Relating to Current Executive Officers. Set forth below are the
names and ages of the current executive officers of the Company, other than
Walter E. and Gary H. Schoenfeld and George E. McCown (see "Proposal
1 -- Election of Directors"), together with the positions held by these persons.
<TABLE>
<CAPTION>
NAME AGE TITLE
---- --- -----
<S> <C> <C>
Neal R. Lyons.................... 42 President -- Retail Stores
Stephen M. Murray................ 38 Senior Vice President -- International and Apparel
Kyle B. Wescoat.................. 47 Vice President and Chief Financial Officer
Jay E. Wilson.................... 52 Vice President -- World Marketing
Steven J. Van Doren.............. 43 Vice President -- Promotions
Craig E. Gosselin................ 39 Vice President, General Counsel, and Corporate Secretary
Charles C. Kupfer................ 38 Vice President, Controller and Assistant Corporate Secretary
Joseph D. Giles.................. 36 Vice President and Chief Information Officer
Scott A. Brabson................. 44 Vice President -- Global Sourcing
Michael C. Jonte................. 37 Vice President -- Merchandising
Chris D. Strain.................. 30 Vice President -- Marketing
</TABLE>
6
<PAGE> 9
NEAL R. LYONS has been President -- Retail Stores since March 1999. Prior
to that time he was Senior Vice President -- Retail Stores from September 1997
to March 1999. From March 1995 to September 1997, he was Vice
President -- Retail Stores. Prior to joining the Company, Mr. Lyons was Director
of Stores for Reebok from June 1994 to February 1995. Mr. Lyons received a
B.B.A. in Psychology and Business Management from the University of Nebraska.
Mr. Lyons is currently enrolled in the M.B.A. program of Harvard University.
STEPHEN M. MURRAY has been Senior Vice President -- International and
Apparel since October 1998. In addition to his other duties, Mr. Murray is
responsible for footwear merchandising. Prior to joining the Company, Mr. Murray
was employed by Reebok International Ltd. for seven years, eventually becoming
Vice President of Global Apparel, responsible for all merchandising, design,
product development, and brand strategy for Reebok apparel throughout the world.
Prior to joining Reebok, Mr. Murray was Sales Director for Dunlop Slazenger
International, where he managed sales of hard goods and apparel.
KYLE B. WESCOAT has been Vice President and Chief Financial Officer since
February 1996. From November 1995 to February 1996, Mr. Wescoat served as
Assistant to the President of Equity Management Inc., a marketing services
company that specializes in brand extension licensing. From January 1994 to
October 1995, Mr. Wescoat was Chief Financial Officer of Shirmar Corporation, a
holding company with interests in several industrial products companies. Mr.
Wescoat received a B.S. from Drexel University and an M.B.A. from the University
of Michigan.
JAY E. WILSON has been Vice President -- World Marketing of the Company
since August 1999. He was Vice President -- Marketing from December 1996 to
August 1999. Prior to joining the Company, Mr. Wilson was a consultant with Dark
Horse Distribution from February 1995 to December 1996, focusing on extreme
sports brands. From March 1994 to February 1995, he was a Managing Partner of
Brand Building Communications, a venture providing brand building expertise to
clients such as Disney Televentures and Rhino Records. Mr. Wilson received a
B.A. from the Art Center College of Design.
STEVEN J. VAN DOREN has been a Vice President since May 1990. He is
currently Vice President -- Promotions, primarily responsible for the Company's
point-of-purchase and promotional efforts, and is the Company's executive in
charge of the VANS Warped Tour,(TM) a traveling music/sports festival sponsored
by the Company, the VANS Triple Crown(TM) Series of alternative sports events,
and the Company's High Cascade Snowboard Camp.(TM) Mr. Van Doren has been
employed by the Company in various capacities since the formation of the
predecessor of the Company in 1966. Mr. Van Doren is the son of Paul Van Doren,
a founder of the predecessor of the Company.
CRAIG E. GOSSELIN has been Vice President and General Counsel of the
Company since July 1992. He became Secretary in May 1993. He was an Assistant
Secretary of the Company from February 1988 to May 1993. From March 1990 to June
1992, Mr. Gosselin was a Partner of the law firm of Cooper & Dempsey. Mr.
Gosselin received a B.B.A. from Loyola Marymount University and a J.D. from
Southwestern University School of Law.
CHARLES C. KUPFER has been a Vice President and Assistant Corporate
Secretary of the Company since July 1996. He was the Company's Controller from
September 1994 to October 1996 when he took charge of the Company's production
and sourcing efforts. He re-assumed the position of Controller again in November
1998. From July 1995 to December 1995 he was Acting Chief Financial Officer of
the Company. He served as Assistant Controller of the Company from August 1992
until September 1994. Mr. Kupfer received a B.A. from the University of
California at Irvine and a second B.A. from the California State University at
Fullerton.
JOSEPH D. GILES has been Vice President and Chief Information Officer of
the Company since March 1999. Mr. Giles was Vice President and Chief Information
Officer of Virgin Interactive Entertainment from September 1998 to March 1999.
Prior to that time, he was Executive Director, Systems Planning for Paramount
Pictures from May 1994 to September 1996. Mr. Giles received a B.B.A. (MIS) from
the University of New Mexico and an M.B.A. from Pepperdine University.
7
<PAGE> 10
SCOTT A. BRABSON has been Vice President -- Global Sourcing of the Company
since November 1997, and since March 1999 has managed the Company's snowboard
division. Prior to joining the Company, he was Vice President -- Global Sourcing
and Operations of Deckers Outdoor Corporation from September 1996 to November
1997. From March 1992 to September 1996 he was Managing Director, Asian
Operations and Worldwide Sourcing for L.A. Gear, Inc. Mr. Brabson has a B.A. in
Business Administration from the University of Michigan.
MICHAEL C. JONTE has been Vice President -- Merchandising of the Company
since January 1998. He currently is primarily responsible for footwear
merchandising and inventory control. Prior to January 1998 he was Director of
Retail Merchandising of the Company from December 1995 to January 1998,
ultimately becoming responsible for the Company's TRIPLE CROWN OF SURFING(R)
apparel line. From June 1992 to December 1995, Mr. Jonte was Director of Product
Development for Young Mens and Children for B.U.M. Equipment. Mr. Jonte has a
B.A. in Public Administration from San Diego State University.
CHRIS D. STRAIN has been Vice President -- Marketing of the Company since
August 1999. Prior to joining the Company, Mr. Strain was employed in various
positions at PepsiCo., including national account sales, field marketing, sales
strategy, product category management and brand marketing. He was Brand Manager
for the Mountain Dew product line and Sports Marketing Manager for all of
PepsiCo's products. Mr. Strain has a B.B.A in Marketing from the University of
Texas.
Executive Officers who have left the Company since the last Annual
Meeting. The following individuals resigned from the Company since the last
Annual Meeting: Sari K. Ratsula, Gary L. Dunlap and Robert H. Camarena.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
The following table discloses compensation for the three fiscal years ended
May 31, 1999 received by (i) the Company's President and Chief Executive Officer
during fiscal 1999, and (ii) the four remaining most highly paid executive
officers as of May 31, 1999 (collectively, the "named executive officers").
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------------------
FISCAL SECURITIES
YEAR ANNUAL COMPENSATION RESTRICTED UNDERLYING
NAME AND PRINCIPAL ENDED --------------------------------- STOCK OPTIONS/ ALL OTHER
POSITION MAY 31 SALARY($) BONUS($) OTHER($) AWARDS($) SARS(#) COMPENSATION($)
------------------ ------ --------- -------- -------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Gary H. Schoenfeld........... 1999 361,309 115,667 -- -0- 107,626
President and Chief 1998 350,000 148,584 -- -0- 204,912(5) -0-
Executive Officer 1997 289,713 147,500 -- -0- 200,000 -0-
Walter E. Schoenfeld......... 1999 290,000 -0- 36,298(1) -0- -0- -0-
Chairman of the 1998 288,000 -0- 42,501(2) -0- -0- -0-
Board 1997 226,627 -0- 117,356(3) -0- -0- -0-
Neal R. Lyons................ 1999 236,992 48,785 -- -0- 29,821
President -- 1998 208,078 67,415 -- -0- 27,684(5) -0-
Retail Sales 1997 182,407 60,000 -- -0- 10,000 -0-
Sari K. Ratsula.............. 1999 202,596 15,700 -- -0- 4,421
Senior Vice President -- 1998 200,000 61,156 -- -0- 24,692(5) -0-
Sales & Prod. Dev. (4) 1997 171,782 52,000 -- -0- 20,000 -0-
Craig E. Gosselin............ 1999 189,393 26,316 -- -0- 14,000
Vice President, 1998 181,635 27,407 -- -0- 12,885(5) -0-
General Counsel 1997 175,607 26,392 -- -0- 2,000 -0-
and Corporate
Secretary
</TABLE>
- ---------------
(1) Includes $30,000 paid by the Company to reimburse Mr. Schoenfeld for the
expense of maintaining secretarial support in Seattle, which is his home,
for purposes of conducting Company business there.
8
<PAGE> 11
(footnotes from previous page continued)
(2) Includes $30,000 paid by the Company to reimburse Mr. Schoenfeld for the
expense of maintaining the secretarial support referenced in footnote (1)
above.
(3) Includes $60,000 paid by the Company for an automobile to replace the
automobile previously leased for Mr. Schoenfeld. Mr. Schoenfeld primarily
uses the vehicle for Company business. Also includes (i) $31,356 paid by the
Company for accommodations at a temporary residence Mr. Schoenfeld
maintained in fiscal 1997, and (ii) $26,000 paid by the Company to reimburse
Mr. Schoenfeld for the secretarial support referred to in footnote (1)
above.
(4) Ms. Ratsula resigned from the Company effective as of July 31, 1999.
(5) Includes options which were repriced during fiscal 1998 as follows: Mr.
Schoenfeld, 200,000 shares; Mr. Lyons, 25,000 shares; Ms. Ratsula, 21,885
shares; and Mr. Gosselin, 10,329 shares.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants in fiscal 1999 to
the named executive officers.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------------
PERCENT
NUMBER OF OF TOTAL
SECURITIES OPTIONS/SAR'S EXERCISE MARKET
UNDERLYING GRANTED TO OF VALUE ON
OPTIONS/ EMPLOYEES BASE GRANT
SAR'S IN FISCAL PRICE EXPIRATION DATE
NAME GRANTED(#) 1999 ($/SHARE) DATE ($/SHARE)
---- ----------- ------------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Gary H. Schoenfeld........ 1. 7,626 1.4% $5.88 9/2/08 $5.88
2. 100,000 18.9% $6.25 3/11/09 $6.25
Walter E. Schoenfeld...... -0- N/A N/A N/A N/A
Neal R. Lyons............. 1. 4,821 1.0% $5.88 9/2/08 $5.88
2. 25,000 4.8% $6.25 3/11/09 $6.25
Sari K. Ratsula........... 1. 4,421 1.0% $5.88 9/2/08 $5.88
Craig E. Gosselin......... 1. 4,000 1.0% $5.88 9/2/08 $5.88
2. 10,000 1.9% $6.25 3/11/09 $6.25
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
FOR OPTION TERM
-----------------------------------------
0% 5% 10%
APPRECIATION APPRECIATION APPRECIATION
NAME ($) ($) ($)
---- ------------ ------------ ------------
<S> <C> <C> <C>
Gary H. Schoenfeld........ -0- 28,200 71,465
-0- 393,059 996,089
Walter E. Schoenfeld...... N/A N/A N/A
Neal R. Lyons............. -0- 17,828 45,179
-0- 98,265 249,022
Sari K. Ratsula........... -0- 16,348 41,430
Craig E. Gosselin......... -0- 14,792 37,485
-0- 39,306 99,609
</TABLE>
Each of the options in this table is an incentive stock option which
expires 10 years after the date of grant. The options are either exercisable in
three annual increments of 33.33% or five annual increments of 20.0% commencing
on the first anniversary of the grant date. The options also became fully
exercisable in the event of a change in control of the Company.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table provides information on option/SAR exercises in fiscal
1999 by the named executive officers, and the value of such officers'
unexercised options/SARs at May 28, 1999, the last trading day of fiscal 1999.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY OPTIONS/
OPTIONS/SARS AT FISCAL SARS AT FISCAL
SHARES YEAR-END(#) YEAR-END ($)(1)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gary H. Schoenfeld.......... -0- N/A 163,364 204,888 401,442 671,960
Walter E. Schoenfeld........ -0- N/A 169,212 -0- 822,469 N/A
Neal R. Lyons............... -0- N/A 17,537 49,968 50,837 175,693
Sari K. Ratsula............. -0- N/A 35,236 23,332 99,728 93,030
Craig E. Gosselin........... -0- N/A 33,085 22,244 150,254 100,422
</TABLE>
- ---------------
(1) Calculated by multiplying the number of shares by the difference between (i)
$10.94, the closing sales price of the Common Stock on May 28, 1999, the
last trading day of fiscal 1999, and (ii) the exercise prices of those
options which were in-the-money as of that date.
9
<PAGE> 12
DEFERRED COMPENSATION PLAN
The Company has established a deferred compensation plan for the benefit of
Walter E. Schoenfeld, the Company's Chairman of the Board, and his spouse. Under
the plan, the Company has established a trust which holds and disperses assets
pursuant to the terms of the plan. The Company will, for a period of five years,
deposit $200,000 per year with the trustee of the trust. The trust funds are
invested by the trustee in accordance with instructions given by the Company.
Commencing in 2001, the trustee will pay Mr. Schoenfeld $100,000 per year from
the trust funds. Such payments will continue for the remainder of Mr.
Schoenfeld's life and then will be paid to his spouse, if she survives him.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended (the "Securities
Act"), or the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
that might incorporate future filings, including this Proxy Statement in whole
or in part, the following report and the Performance Graph on page 13 shall not
be incorporated by reference into any such filings.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL
Decisions on compensation of the Company's executives generally are made by
the Compensation Committee of the Board. Each member of the Compensation
Committee is an "outside director," as such term is defined under the final
regulations promulgated by the Internal Revenue Service under Section 162(m) of
the Internal Revenue Code of 1986 (the "Code") (collectively, "IRC Section
162(m)"). All decisions relating to the compensation of the Company's executive
officers, including decisions about grants or awards under the Company's 1991
Long-Term Incentive Plan (the "Incentive Plan"), and the Vanstastic Employee
Stock Option Plan (the "Vanstastic Plan"), are made solely by the Compensation
Committee. Set forth below is a report submitted by the Compensation Committee
addressing the Company's compensation policies for fiscal 1999 as they affected
the named executive officers.
COMPENSATION POLICIES TOWARD EXECUTIVE OFFICERS
The Compensation Committee's executive compensation policies are designed
to provide competitive levels of compensation that integrate pay with the
Company's annual and long-term performance goals, reward above-average corporate
performance, recognize individual initiative and achievements, and assist the
Company in attracting and retaining qualified executives. Target levels of the
executive officers' overall compensation are intended to be consistent with
others in the Company's industry, but are increasingly being weighted toward
programs contingent upon the Company's performance. Certain key managers also
are eligible for selection as participants in the Company's executive
compensation plans. As a result of the increased emphasis on tying executive
compensation to corporate performance, in any particular year the Company's
executives may be paid more or less than the executives of the Company's
competitors, depending upon the Company's performance. It is the goal of the
Compensation Committee, through the grant or award of incentive compensation
tied to corporate performance, to pay the Company's executives and key managers
more than the executives and key managers of competitors if the Company performs
well. Increased orientation of executive compensation policies toward long-term
performance has been accompanied by increased utilization of objective
performance criteria.
The Compensation Committee also endorses the position that stock ownership
by management and stock-based performance compensation arrangements are
beneficial in aligning management's and stockholders' interests in the
enhancement of stockholder value. Thus, the Committee has also increasingly
utilized these elements in the Company's compensation packages for its executive
officers and for certain key managers.
10
<PAGE> 13
RELATIONSHIP OF COMPANY PERFORMANCE TO EXECUTIVE COMPENSATION
Compensation paid to the named executive officers (other than Walter E.
Schoenfeld) and to the Company's other executive officers for fiscal 1999,
consisted of the following elements: (i) base salary; (ii) long-term incentive
compensation in the form of awards of incentive stock options under the
Incentive Plan and the Vanstastic Plan; and (iii) bonus compensation. The
Company also provides a 401(k) pension plan for all employees which includes a
Company matching contribution. No matching contributions were made under such
plan for the named executive officers during fiscal 1999.
Base Salary. It is the policy of the Compensation Committee to approve only
cost-of-living adjustments to executive officer salaries unless an officer's
responsibilities have been significantly increased or such officer's performance
has been superior. For fiscal 1999, all executive officers of the Company, other
than Mr. Lyons, only received cost-of-living adjustments to their salaries.
Grant of Options under the Incentive Plan. In March 1999, the Committee
approved grants of incentive stock options under the Incentive Plan to Messrs.
Gary Schoenfeld, Lyons, and Gosselin among the named executive officers, and to
certain other executive officers and key managers. See "Option/SAR Grants in
Last Fiscal Year." In determining the size and other terms of the fiscal 1999
grants, the Compensation Committee considered the value of the services provided
by these individuals, the value and number of their previously granted options,
and the value and number of options previously granted to individuals of
comparable levels. The exercise prices of the options were based on the closing
sales price of the Common Stock on the dates of grant.
Grants of Options under the Vanstastic Plan. Grants of options under the
Vanstastic Plan are determined in the sole discretion of the Compensation
Committee. Unless otherwise determined by the Committee, officers of the Company
are entitled to receive an annual grant of options equal to 20% of their base
salary, divided by the closing sales price of the Company's Common Stock on the
date of grant. On September 3, 1998, all the officers of the Company, including
the named executive officers, received grants of options pursuant to such
formula. See "Option/SAR Grants in Last Fiscal Year."
Annual Bonus. Generally, it is the Company's policy that annual bonuses may
be earned by each named executive officer (other than Walter E. Schoenfeld),
each other executive officer of the Company, and certain key managers, under
Bonus Programs adopted each fiscal year by the Compensation Committee, solely on
the basis of (i) whether the Company achieves corporate performance targets, and
(ii) whether the executive or key manager achieves individual performance goals.
Under the Fiscal 1999 Bonus Program, the named executive officers, the other
executive officers, and certain managers were entitled to receive bonuses equal
to a percentage of their base salaries if certain objectives were met during the
year. Such bonuses were dependent on the Company meeting a budgeted earnings per
share goal and the satisfaction of individual performance objectives. Since the
Company did not meet its budgeted earnings per share goal for fiscal 1999, full
bonuses were not paid to any of the named executive officers or any of the other
executive officers of the Company for such year.
CEO COMPENSATION
Under Gary H. Schoenfeld's employment agreement, his salary compensation
may not be set below $350,000 per year. It is the intention of the Committee to
tie most of Mr. Schoenfeld's future annual compensation to the performance of
the Company. In that regard, it is the intention of the Committee to only
increase Mr. Schoenfeld's future salary compensation in accordance with cost of
living standards, and to provide him with bonus opportunities equal to 100% of
his salary if the Company meets certain objectives set by the Committee at the
beginning of each fiscal year.
From time to time, the Committee also grants Mr. Schoenfeld incentive stock
options. In that regard, the Committee granted him the options described under
the caption "Option/SAR Grants in Last Fiscal Year" during fiscal 1999. The size
and other terms of these option grants were determined based on the Company's
achievement of a number of new strategic initiatives and partnerships, including
the opening of skateparks and the formation of joint ventures with Pacific
Sunwear and Sunglass Hut International.
11
<PAGE> 14
CERTAIN TAX CONSIDERATIONS
IRC Section 162(m) limits the Company to a deduction for federal income tax
purposes of not more than $1 million of compensation paid to certain executive
officers in a taxable year. Compensation above $1 million may be deducted if it
is "performance-based compensation" within the meaning of the Code. Generally,
options granted (i) by a Compensation Committee consisting solely of outside
directors, (ii) under a Plan approved by stockholders, and (iii) at the fair
market value of the underlying securities, are considered "performance-based" if
the Plan contains a limitation on the number of shares which can be granted to
an individual in any one fiscal year.
The Compensation Committee concluded that it is in the best interests of
the Company to establish restrictions on the granting of options under the
Incentive Plan and the Vanstastic Plan to assist in the qualification of
compensation recognized on the exercise of such options as "performance-based."
As a result, it adopted Amendment No. 3 to the Incentive Plan in July 1994,
which limits the aggregate number of shares which may be granted under the Plan
to any one individual to 300,000 in any one fiscal year. This Amendment was
approved by the Stockholders at the 1994 Annual Meeting of Stockholders. The
Committee also included a similar provision in the Vanstastic Plan. The
Compensation Committee does not believe that other components of the Company's
annual cash compensation will be likely to exceed $1 million in the foreseeable
future and, therefore, concluded that no further action, with respect to
qualifying such compensation for deductibility, was necessary at this time. The
Compensation Committee will continue to evaluate the advisability of qualifying
the deductibility of such compensation in the future.
Respectfully Submitted
by the Compensation Committee
Wilbur J. Fix
Lisa M. Douglas
Kathleen M. Gardarian
Philip H. Schaff, Jr.*
Leonard R. Wilkens
- ---------------
* Mr. Schaff is not standing for re-election to the Board of Directors.
12
<PAGE> 15
PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total stockholder
return among the Company, the NASDAQ Stock Market Index and a Peer Group Index,
from May 31, 1994 through May 31, 1999. Note: the stock price performance shown
on the graph is not necessarily indicative of future price performance.
<TABLE>
<CAPTION>
NASDAQ STOCK
VANS, INC. MARKET (U.S.) PEER GROUP
---------- ------------- ----------
<S> <C> <C> <C>
5/31/94 100 100 100
5/31/95 94 119 125
5/31/96 410 173 253
5/31/97 256 195 306
5/31/98 205 247 251
5/31/99 224 347 310
</TABLE>
EMPLOYMENT AGREEMENTS WITH NAMED EXECUTIVE OFFICERS
The Company is a party to employment agreements with each of the following
named executive officers.
Walter E. Schoenfeld's employment agreement extends until May 31, 2001.
Under the agreement Mr. Schoenfeld is entitled to a salary of no less than
$288,000, participation in any medical or insurance plans established by the
Company, and to reimbursement of expenses incurred by him in the performance of
his duties, including living expenses and a car allowance. The Company
reimburses Mr. Schoenfeld for the reasonable expenses of his spouse when she
accompanies him on business trips, and for the expense of maintaining
secretarial support in Seattle, where he lives, for purposes of conducting
Company business there.
Gary H. Schoenfeld's employment agreement extends until May 31, 2002, and
is automatically renewable for additional one-year periods at the end of each
fiscal year. His agreement entitles him to an annual salary of no less than
$350,000 and a car allowance, and he is entitled to participate in the Company's
13
<PAGE> 16
stock option and bonus plans, as well as any medical or insurance plans
established by the Company. Mr. Schoenfeld is entitled to severance pay equal to
one year's salary if he is terminated without cause or resigns from the Company
for a good reason, or resigns or is terminated after a "Change in Control" of
the Company during the term of his agreement. The term "Change of Control"
includes mergers or acquisitions involving the Company and material changes in
the composition of the Board of Directors.
Craig E. Gosselin's agreement extends until September 17, 2000. His
agreement entitles him to an annual salary of no less than $176,000. Mr.
Gosselin is also entitled to participation in the Company's stock option and
bonus plans, as well as any medical or insurance plans established by the
Company. Mr. Gosselin is entitled to a severance payment equal to one year's
salary if he is terminated or resigns from the Company for substantially the
same reasons as set forth in Mr. Schoenfeld's agreement.
Neal R. Lyons' agreement is generally the same as Mr. Gosselin's, with the
following differences: Mr. Lyons' agreement extends until May 31, 2002; his
minimum base compensation is $275,000 for fiscal 2000, $300,000 for fiscal 2001,
and $325,000 for fiscal 2002; his severance payment is equal to nine month's
pay; and the Company leases an automobile for him and reimburses him for certain
educational courses.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file with the SEC initial reports
of ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Officers, directors and greater than 10%
stockholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file. To the Company's knowledge, based solely
on a review of the copies of such reports furnished to the Company and written
representations that no other reports were required during the fiscal year ended
May 31, 1999, all Section 16(a) filing requirements applicable to its officers,
directors, and greater than 10% owners were compiled with.
PROPOSAL 2
APPROVAL OF AMENDMENT NO. 7 TO THE COMPANY'S 1991
LONG-TERM INCENTIVE PLAN
GENERAL
The 1991 Long-Term Incentive Stock Plan (the "Incentive Plan") was adopted
by the Board of Directors of the Company on November 19, 1991, and approved by
the stockholders in October 1992. The Incentive Plan will terminate by its own
terms on November 18, 2001.
Options granted under the Plan may be either incentive stock options within
the meaning of Section 422 of the Code, or non-statutory options. In addition,
the Incentive Plan provides for the grant of restricted stock awards. The
Incentive Plan is not a qualified deferred compensation plan under Code Section
401(a) and is not subject to the provisions of the Employee Retirement Income
Security Act of 1974.
As of September 1, 1999, and after giving effect to the amendment discussed
below, a total of 2,300,000 shares had been reserved for issuance under the
Incentive Plan. Of these shares, options for 807,944 shares had been exercised,
options to purchase 1,306,082 shares were outstanding, and 185,974 shares were
available for future grants. The closing sales price of the Common Stock, as
reported on the NASDAQ Stock Market on September 1, 1999, was $12.00.
PROPOSAL
In July 1999, the Board of Directors approved Amendment No. 7 to the
Incentive Plan ("Amendment No. 7") to increase the number of shares reserved for
issuance under the Plan by 300,000 shares. The stockholders are being requested
to approve Amendment No. 7.
Amendment No. 7 was adopted to replenish the number of shares available
under the Incentive Plan so that additional grants could be made in the future
to qualified participants. The last time the Board approved
14
<PAGE> 17
an increase in such shares was in 1996. The Board believes that stock options
are a critical component of employee compensation which align the interests of
employees with those of stockholders. If the stockholders fail to approve
Amendment No. 7, the Compensation Committee may be prevented from granting
options to individuals in the future which could hinder the Company's ability to
attract and retain talented employees. Also, approximately 200,000 options
previously granted to certain executive officers of the Company which are
subject to the approval of Amendment No. 7 would have to be cancelled.
SUMMARY OF THE INCENTIVE PLAN
Purposes of the Plan
The purposes of the Incentive Plan are to attract and retain the best
available personnel, to provide additional incentive to employees, consultants,
and directors of the Company, and to promote the success of the Company's
business.
Administration; Limits on Grants
The Incentive Plan is administered by the Compensation Committee, which
currently consists of five members of the Board, all of whom currently qualify
as outside directors under IRC Section 162(m). The Compensation Committee has
sole discretion to interpret any provision of the Incentive Plan. This
determination is final and conclusive. Members of the Compensation Committee
receive no cash compensation for administering the Incentive Plan.
The Incentive Plan limits the discretion of the Compensation Committee in
granting stock options to employees. This limitation is intended to preserve the
Company's ability to deduct for federal income tax purposes the compensation
expense relating to stock options granted to certain executive officers under
the Incentive Plan. This limitation provides that an employee may be granted, in
any one fiscal year, no more than 300,000 shares through stock options under the
Incentive Plan. Without this limitation, new IRC Section 162(m) might not allow
the Company to deduct such compensation expense. See "Tax Information."
Eligibility
The Incentive Plan provides that options and restricted stock awards may be
granted to the Company's employees and consultants, and to the employees of, and
consultants to, the Company's majority-owned subsidiaries. As of September 1,
1999, the Company had approximately 1,140 employees, all of whom were eligible
to participate in the Incentive Plan. Only employees may be granted incentive
stock options, and the Compensation Committee selects the optionees and
determines the number of shares to be subject to each option.
Directors and consultants are only entitled to receive non-statutory stock
options, and outside directors are only entitled to receive non-statutory
options pursuant to the Company's automatic option grant program. Under such
program, outside directors receive an initial grant of a non-statutory option
for 7,500 shares of Common Stock when (i) they are elected to the Board, or (ii)
a director who is an employee becomes an outside director, and each such
director receives an annual grant of a non-statutory option for 5,000 shares of
Common Stock on each date of the annual meeting of stockholders. The exercise
price of each grant of options under the automatic option grant program is the
closing sales price of the Common Stock on the date of grant, as reported on the
NASDAQ Stock Market, and each such option vests in equal increments over three
years.
Terms of Options
Each option granted under the Incentive Plan is evidenced by a written
stock option agreement between the Company and the optionee and is subject to
the following additional terms and conditions:
(a) Duration and Termination of Options. Options granted under the
Incentive Plan have a maximum term of ten years from the date of grant. An
option granted to a person who, immediately
15
<PAGE> 18
before the grant of such option, owns more than 10% of the voting power or
value of all classes of stock of the Company, may not have a term of more
than five years. No option may be exercised after the expiration of its
term.
(b) Exercise of the Option. The Compensation Committee determines on
the date of grant of each option when the option will become exercisable.
Options are exercisable in a variety of ways depending on the terms of the
optionee's agreement with the Company. In general, an option is exercisable
at any time or times during its term, in part or in full, to the extent the
options are then vested. Options are not exercisable for a fraction of a
share. An option granted under the Incentive Plan is exercised by giving
written notice of exercise to the Company, specifying the number of shares
of Common Stock to be purchased and tendering payment of the purchase price
to the Company. Payment for shares issued upon exercise of an option may,
depending on the terms of the option agreement, consist of cash, check,
promissory notes, surrender of shares of Common Stock owned by the optionee
or such other consideration as determined by the Compensation Committee.
(c) Exercise Price. The exercise price of options granted under the
Incentive Plan is determined by the Compensation Committee. The exercise
price of incentive stock options may not be less than 100% of the fair
market value of the Common Stock on the date the option is granted. The
exercise price of non-statutory stock options may not be less than 85% of
the fair market value of the Common Stock on the date the option is
granted. However, the exercise price of options granted to a person who
owns more than 10% of the voting power or value of all classes of stock of
the Company must not be less than 110% of the fair market value on the date
of the grant. The Common Stock is currently traded on the NASDAQ Stock
Market. It is the policy of the Compensation Committee that, while the
Company's stock is traded on the NASDAQ Stock Market, the fair market value
of the Common Stock is the reported closing sales price. If the Common
Stock is listed on a stock exchange, the fair market value will be the
closing sales price on such exchange.
(d) Termination of Employment. If an optionee's employment by the
Company is terminated for cause, the option is exercisable for 30 days from
the date of termination to the extent vested on the date of termination. If
an optionee's employment is terminated without cause, the optionee resigns
with the consent of the Compensation Committee, or the optionee retires
under the provision of any retirement plan of the Company, the option is
exercisable for four months from the date of termination, resignation or
retirement, to the extent vested on such date. However, the option cannot
be exercised beyond the expiration date of the option.
(e) Death or Permanent Disability. If an optionee dies or becomes
permanently disabled while employed by the Company, the option may be
exercised by the optionee's legal representatives within 18 months after
the date of death or disability, to the extent exercisable on such date.
However, the option cannot be exercised beyond the expiration date of the
option.
(f) Non-transferability of Options. An option is not transferable by
the optionee, other than by will or the laws of descent and distribution,
by a transfer to a trust for the benefit of the optionee or his or her
immediate family, by a transfer to any member of the immediate family of
the optionee, or by a transfer to a partnership, the sole partners of which
are the optionee or his or her immediate family.
(g) Other Provisions. The option agreement may contain other
provisions not inconsistent with the Incentive Plan as determined by the
Compensation Committee.
Terms of Restricted Stock
Restricted stock awards provide additional compensation incentives in the
form of shares of Common Stock granted at a purchase price determined by the
Compensation Committee, if any, but subject to forfeiture if certain conditions
as the Compensation Committee may establish are not met. All or part of any
restricted stock award may be subject to such terms, conditions and limitations
as may be established by the Compensation Committee including, but not limited
to, continuous service with the Company, achievement of specific business
objectives, peer company comparisons, increases in specified indices, attaining
specified
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growth rates, and other comparable measurements of Company performance. Such
awards may be based on any specified valuation criteria. Shares granted pursuant
to restricted stock awards bear a legend preventing transfer without the consent
of the Company. At the conclusion of the restriction period, the legend is
removed. During the restriction period, recipients may have, at the discretion
of the Compensation Committee, all other rights to stockholders of the Company
including the right to vote and to receive dividends.
Changes in Capitalization
In the event of changes in the Common Stock by reason of stock dividends,
split-ups or combinations of shares, reclassifications, recapitalizations,
mergers, consolidations, reorganizations or liquidations, the Compensation
Committee will adjust the exercise price and the number and class of share
subject to each option or restricted stock award as the Compensation Committee
deems appropriate. Such adjustment is final and conclusive.
Reports
The Company will provide optionees with all required annual reports
regarding stock options and restricted stock issued under the Incentive Plan and
will give notice to participants of the grant of such options and stock. In
addition, the Company will respond to reasonable requests for information
regarding stock options and restricted stock on an informal basis from time to
time.
Amendment and Termination
The Board may, at any time, amend or terminate the Incentive Plan without
approval of the stockholders, unless such amendment: (i) increases the number of
shares under the Plan; (ii) modifies the requirements for eligibility under the
Plan; or (iii) modifies the Plan in any other way that requires stockholder
approval under Rule 16b-3 under the Exchange Act or Section 422(b) of the Code.
Any amendment or termination of the Incentive Plan is subject to the rights of
optionees under agreements entered into prior to such amendment or termination.
Tax Information
The Omnibus Budget Reconciliation Act of 1993 added IRC Section 162(m) to
the Code. Under IRC Section 162(m), the allowable deduction for compensation
paid or accrued with respect to the chief executive officer and each of the four
most highly compensated executive officers of a publicly-held corporation is
limited to no more than $1,000,000 per year for fiscal years beginning on or
after January 1, 1994. To enable the Company to preserve the benefit of
receiving a tax deduction for the full amount of income recognized by the
Company's executive officers upon exercise of stock options, the Board of
Directors included a provision in the Incentive Plan to limit the number of
shares that may be granted to an employee in any one fiscal year. Such provision
was approved by the stockholders at the 1994 Annual Meeting of Stockholders.
The following is a brief summary of the federal income tax consequences of
transactions under the Incentive Plan based on federal income tax laws in effect
as of September 1, 1999. This summary is not intended to be exhaustive and does
not discuss the tax consequences of a participant's death or provisions of the
income tax laws of any municipality, state or foreign country in which an
optionee may reside.
INCENTIVE STOCK OPTIONS. No taxable income is recognized by the optionee
upon grant or exercise of an incentive stock option (unless the alternative
minimum tax rules apply). If Common Stock is issued to an optionee pursuant to
the exercise of an incentive stock option, and if no disqualifying disposition
of such shares is made by such optionee within two years after the date of grant
or within one year after the transfer of such shares to such optionee, then (i)
upon the resale of such shares, any amount realized in excess of the option
exercise price will be treated as long-term capital gain and any loss sustained
will be long-term capital loss, and (ii) no deduction will be allowed to the
Company for federal income tax purposes. The exercise of an incentive stock
option may result in alternative minimum tax liability for the optionee.
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If Common Stock acquired upon the exercise of an incentive stock option is
disposed of before the expiration of either holding period described above,
generally (i) the optionee will recognize income in the year of disposition in
an amount equal to the excess (if any) of the fair market value of the shares at
exercise (or, if less, the amount realized on the disposition of the shares)
over the option exercise price paid for such shares, and (ii) the Company is
entitled to a tax deduction in the same amount. Any further gain or loss
realized by the participant will be taxed as short-term or long-term capital
gain or loss, as the case may be, and will not result in any deduction by the
Company. Different rules may apply if shares are purchased by any optionee who
is subject to Section 16(b) of the Exchange Act and the optionee subsequently
disposes of such shares prior to the expiration of statutory holding periods.
NON-STATUTORY STOCK OPTIONS. Generally, with respect to non-statutory stock
options: (i) no income is recognized by the optionee at the time the option is
granted; (ii) at exercise ordinary income is recognized by the optionee in an
amount equal to the difference between the option exercise price paid for the
shares and the fair market value of the shares on the date of exercise, and the
Company is entitled to a tax deduction in the same amount; and (iii) at
disposition, any gain or loss is treated as capital gain or loss. In the case of
an optionee who is also an employee, any income recognized upon exercise of a
non-statutory stock option will constitute wages for which withholding will be
required.
RESTRICTED STOCK. A participant in the Incentive Plan who receives shares
of Common Stock pursuant to restricted stock awards which (i) are subject to a
substantial risk of forfeiture, and (ii) are not transferable under Section 83
of the Code, will not recognize income for federal income tax purposes until the
earlier of the time when (iii) the Common Stock is no longer subject to a
substantial risk of forfeiture, or (iv) the restrictions on the transfer of the
shares of Common Stock lapse. At that time the participant will be subject to
tax at ordinary income tax rates on the difference between (i) the fair market
value of the Common Stock at such time, and (ii) the amount, if any, paid for
the shares. The Company will be entitled to a deduction in an amount equal to
the ordinary income includable by the participant at the time the participant is
required to recognize such income, provided that the Company withholds any
applicable federal and state income taxes. Dividends paid on any restricted
stock, prior to termination of the restrictions, will be taxed to the
participant as ordinary income when received.
A participant who receives shares of Common Stock pursuant to restricted
stock awards which (i) are subject to a substantial risk of forfeiture, and (ii)
are not transferable under Section 83 of the Code, however, can elect to include
in his or her taxable income, the excess of (iii) the fair market value of the
share on the date of the grant or purchase over (iv) the purchase price paid for
the shares, if any, in the year of grant or purchase. If the participant so
elects, (i) the Company will be entitled to a deduction in an amount equal to
the amount that the participant is required to included in income at the time
the participant is required to include such amount income, provided that the
Company withholds any applicable federal and state income taxes, and (ii) on the
sale or exchange of the shares by the participant, he or she will be entitled to
treat the excess of (iii) the amount realized on the sale or exchange of the
shares over (iv) the fair market value of the shares on the purchase or grant
date as capital gain.
REQUIRED VOTE
The affirmative vote of the holders of a majority of the shares of the
Common Stock voting in person or by proxy on this proposal at the Annual Meeting
is required to approve Amendment No. 7. Pursuant to the Restated By-laws,
abstentions and broker non-votes will not be deemed votes cast.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
YOU APPROVE AMENDMENT NO. 7 TO THE INCENTIVE PLAN.
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PROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
GENERAL
KPMG LLP have been the independent auditors of the Company since November
1, 1990 and, upon recommendation of the Audit Committee, have been appointed by
the Board of Directors as the auditors for fiscal 2000. The stockholders of the
Company are requested to ratify this appointment. A representative of KPMG LLP
is expected to be present at the Annual Meeting with the opportunity to make a
statement if he or she so desires and to respond to appropriate questions.
REQUIRED VOTE
The vote required to ratify the appointment of KPMG LLP as the Company's
independent auditors is an affirmative vote by stockholders holding a majority
of the total votes cast in person or by proxy at the Annual Meeting. Pursuant to
the Restated By-laws, abstentions and broker non-votes will not be deemed votes
cast.
Delaware law does not require the Company to submit the Board's appointment
of the Company's independent auditors to the stockholders for ratification;
however, the Company has chosen to do so in order to give stockholders an
opportunity to express their views on the Company's independent auditors. If
less than the vote required to ratify KPMG LLP is received, the Board and the
Audit Committee will decide whether to select other independent auditors for
fiscal 2000.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
YOU RATIFY THE APPOINTMENT OF KPMG LLP
AS THE COMPANY'S INDEPENDENT AUDITORS FOR FISCAL 2000.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
None of the directors or executive officers of the Company, none of the
persons who have been directors or executive officers of the Company since May
31, 1998, no nominee for the Board of Directors and no associate of any of the
foregoing, has any material interest, direct or indirect, by way of beneficial
ownership of securities or otherwise, in any matter to be acted upon at the
Annual Meeting, except Proposal 2, since directors and executive officers are
eligible to receive stock options under the Incentive Plan.
STOCKHOLDER PROPOSALS
Any stockholder of the Company wishing to have a proposal considered for
inclusion in the Company's 2000 proxy solicitation materials must set forth such
proposal in writing and file it with the Corporate Secretary of the Company on
or before May 24, 2000. Proposals received after such date shall be considered
untimely and shall not be included in the Company's proxy solicitation materials
or considered at the 2000 Annual Meeting. The Board of Directors of the Company
will review any timely submitted stockholder proposals which are filed as
required and will determine whether such proposals meet applicable criteria for
inclusion in its 2000 proxy solicitation materials.
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<PAGE> 22
OTHER REPORTS
The Company's Annual Report to Stockholders for the fiscal year ended May
31, 1999, has been distributed to stockholders with this Proxy Statement. Upon
written request of any stockholder solicited hereby, the Company will provide,
free of charge, a copy of its Annual Report on Form 10-K (excluding exhibits)
for the fiscal year ended May 31, 1999, which has been filed with the Securities
and Exchange Commission. Requests should be directed to Craig E. Gosselin, Vice
President, General Counsel, and Corporate Secretary, Vans, Inc., 15700 Shoemaker
Avenue, Santa Fe Springs, California 90670.
By Order of the Board of Directors,
/s/ Craig E. Gosselin
Craig E. Gosselin
Vice President, General Counsel,
and Corporate Secretary
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PROXY
VANS, INC.
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 26, 1999
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned stockholder of VANS, INC., a Delaware corporation (the
"Company"), hereby acknowledges receipt of the Proxy Statement and the Notice
of the Annual Meeting of Stockholders of the Company (the "Annual Meeting") to
be held on Tuesday, October 26, 1999, at 10:00 a.m., Pacific Time, at the Vans
Skatepark, located at The Block, 20 City Boulevard West, Orange, California,
and hereby further revokes all previous proxies and appoints Gary H. Schoenfeld
and Craig E. Gosselin and each of them, as proxy of the undersigned, with full
power of substitution for and in the name of the undersigned, at the Annual
Meeting and any adjournments thereof with the same effect as if the undersigned
were present, for the following purposes:
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
- -------------------------------------------------------------------------------
-- FOLD AND DETACH HERE --
<PAGE> 24
<TABLE>
<CAPTION>
Please mark
your votes as ---
indicated in X
this example ---
<S> <C> <C> <C> <C> <C> <C>
AUTHORITY GRANTED AUTHORITY
to vote for all nominees WITHHELD
listed except as indicated to vote for all
to the contrary below nominees listed FOR AGAINST ABSTAIN
(1) The election of the following (2) The approval of
persons as directors of the [ ] [ ] Amendment No. 7 to [ ] [ ] [ ]
Company to serve until the the 1991 Long-Term
next Annual Meeting of Incentive Plan
Stockholders and until their
respective successors are FOR AGAINST ABSTAIN
elected and qualified: (3) The ratification of
the appointment of [ ] [ ] [ ]
Walter E. Schoenfeld Gary H. Schoenfeld KPMG LLP as the
George E. McCown Wilbur J. Fix independent auditors
James R. Sulat Kathleen M. Gardarian of the Company for
Lisa M. Douglas Gerald Grinstein fiscal 2000
Charles G. Armstrong Leonard R. Wilkens
(INSTRUCTION: TO vote against any one nominee, write THE SHARES REPRESENTED BY THIS PROXY WILL
that nominee's name in the space provided below.) BE VOTED AS YOU HAVE INDICATED ABOVE. IF
NO INDICATION HAS BEEN MADE, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED
- ---------------------------------------------------- FOR THE ABOVE NOMINEES AND IN FAVOR OF THE
ABOVE PROPOSALS, AND, AS THE PROXY DEEMS
ADVISABLE, ON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE ANNUAL MEETING.
Signature(s)________________________________________________________________________________ Dated: _______________________, 1999
Sign exactly as your name appears on your stock certificate. When signing as attorney, executor, administrator, trustee or
guardian, please give full title. If more than one trustee, all should sign. All joint owners should sign. If a corporation,
sign in full corporation name by president or other authorized officer. If a partnership, sign in partnership name by authorized
person. Persons signing in a fiduciary capacity should indicate their full title in such capacity.
- ---------------------------------------------------------------------------------------------------------------------------------
-- FOLD AND DETACH HERE --
</TABLE>
