<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 the 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 Section 240.14a-11(c) or Section 240.14a-12
SPORT CHALET, 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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[LOGO OF SPORT CHALET]
June 29, 1999
Dear Shareholder:
On behalf of your Company, I want to cordially invite you to attend the
Annual Meeting of Sport Chalet, Inc., to be held at the Pasadena Hilton Hotel,
150 S. Los Robles Avenue, Pasadena, California 91101, on Thursday, August 5,
1999 at 9:00 a.m. PDST.
The principal business of the Meeting is the election of the Company's Class
1 Director. The attached Notice of Annual Meeting and Proxy Statement fully
describes the business to be transacted.
The Directors and certain officers of the Company will be present to help
host the Meeting, respond to any questions that our shareholders may have, and
to discuss the Company's operating results and future. I therefore encourage you
to attend in order to meet your officers and Directors and to participate in the
business of the Meeting. However, if it is not possible for you to attend,
please sign, date and promptly return the enclosed proxy card immediately to
ensure that your shares will be voted.
Finally, you will find enclosed a 20% off coupon for your use at any of our
20 store locations. As in the past, I encourage you to try our stores and to
write me regarding your shopping experiences, what you liked about our stores
and any suggestions you may have for improvement.
Sincerely,
/s/ Norbert Olberz
Norbert J. Olberz
Chairman and Interim
Chief Executive Officer
<PAGE>
[LOGO OF SPORT CHALET]
-----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 5, 1999
-----------------
Dear Shareholder:
The Annual Meeting of the Shareholders of Sport Chalet, Inc. will be held at
the Pasadena Hilton Hotel, 150 S. Los Robles Avenue, Pasadena, California 91101
Thursday, August 5, 1999 at 9:00 a.m., Pacific Daylight Savings Time. A Proxy
and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the following purposes:
1. To elect one Class 1 Director to serve for a three-year term expiring in
2002, or until a successor is elected and qualified.
2. To transact such other business as may properly come before the Meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on June 11, 1999 as
the record date for determining shareholders entitled to notice of and to vote
at the Meeting or any adjournments thereof. For a period of at least ten days
prior to the Meeting, a complete list of shareholders entitled to vote at the
Meeting shall be open to the examination of any shareholder during ordinary
business hours at the Company's executive offices at 920 Foothill Boulevard, La
Canada, California 91011.
Information concerning the matters to be acted upon at the Meeting is set
forth in the accompanying Proxy Statement.
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT IN PERSON AT THE MEETING ARE URGED
TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY. AN ACCOMPANYING
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES, IS ENCLOSED
FOR YOUR CONVENIENCE.
By order of the Board of Directors,
/s/ Howard Kaminsky
Howard K. Kaminsky
Secretary
La Canada, California
June 29, 1999
<PAGE>
PROXY STATEMENT
---------------
SPORT CHALET, INC.
920 Foothill Boulevard
La Canada, California 91011
ANNUAL MEETING OF SHAREHOLDERS
August 5, 1999
SOLICITATION AND REVOCABILITY OF PROXY
The accompanying Proxy is solicited by and on behalf of the Board of
Directors of Sport Chalet, Inc., a Delaware corporation (the "Company"), for use
at the Annual Meeting of Shareholders to be held on August 5, 1999, or at any
adjournments thereof (the "Meeting").
Any shareholder who executes and delivers a Proxy may revoke it at any
time prior to its use upon (a) receipt by the Secretary of the Company of
written notice of such revocation; (b) receipt by the Secretary of the Company
of a duly executed Proxy bearing a later date; or (c) attending the meeting and
requesting that the Inspector of Elections return his or her Proxy prior to the
taking of any vote.
All shares represented by a Proxy in the accompanying form which is
properly signed, dated, returned and not revoked will be voted in accordance
with the instructions contained therein. Unless authority to vote for the
election of Directors is withheld, Proxies will be voted for the Director
proposed by the Board. Discretionary authority is provided in the Proxy as to
any matters not specifically referred to in the Proxy. Management is not aware
of any other matters which are likely to be brought before the Meeting.
However, if any such matters properly come before the Meeting, it should be
understood that the Proxy holder or holders are fully authorized to vote thereon
in accordance with his or their judgment and discretion.
The Company's Annual Report to Shareholders (the "Annual Report") for
the year ended March 31, 1999, including financial statements, is enclosed with
this Proxy Statement, which is being mailed to shareholders on or about June 29,
1999. The Annual Report does not constitute a part of this Proxy Statement.
The cost of soliciting Proxies in the accompanying form has been, and/or
will be, paid by the Company. In addition, banks, brokers and other custodians,
nominees and fiduciaries will be requested to forward copies of the Proxy
material and Annual Report to their principals and to request authority for the
execution of Proxies. The Company will reimburse such persons for their
reasonable expenses in so doing.
RECORD DATE AND VOTING
The Board of Directors has fixed the close of business, 5:00 p.m.,
Pacific Daylight Savings Time, on June 11, 1999, as the record date for the
determination of shareholders entitled to notice of, and to vote at, the
Meeting. As of the record date of the Meeting there were outstanding 6,577,000
shares of Common Stock. The outstanding shares of Common Stock constitute the
only outstanding voting securities of the Company entitled to be voted at the
Meeting. Each holder of Common Stock is entitled to one vote for each share held
by such person with respect to each matter to be voted on at the Meeting. The
vote of a majority of the shares cast in person or by Proxy is required to elect
a Nominee for Director.
The presence at the Meeting by person or by Proxy, of the holders of a
one-third of the outstanding Common Stock, is necessary to constitute a quorum.
Votes cast by Proxy or in person at the Meeting will be tabulated by the
Inspector of Elections appointed for the Meeting to determine whether or not a
quorum is present. The Inspector of Elections will treat abstentions as shares
that are present and entitled to vote for purposes of determining the presence
of a quorum, but as unvoted for purpose of determining the approval of any
matter submitted to the shareholders for a vote. 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.
As of the record date, Norbert J. Olberz, Chairman of the Board and
Interim Chief Executive Officer, owns indirectly approximately 65% of the
Company's Common Stock, as the Co-Trustee with his wife, Irene Olberz, of the
Olberz Family Trust, a revocable grantor trust. As a result, Chairman Olberz
through the Olberz Family Trust, is the Company's Principal Shareholder
("Principal Shareholder") and will have sufficient voting power to determine the
outcome of any matters submitted to the Company's shareholders for approval.
Thus, the Principal Shareholder has sufficient voting power
<PAGE>
to elect the Nominee proposed by the Board of Directors and he will vote his
shares in favor of the election of such Nominee. In that event, the other
shareholders will be unable to elect any other Director.
ELECTION OF DIRECTORS
Nominee
The Amended and Restated Certificate of Incorporation of the Company
provides that the members of the Company's Board of Directors shall be
classified into three classes, as nearly equal in number as possible, each of
which is to serve three years, with one class being elected each year. The term
of the sole Class 1 Director expires with this Meeting.
Each shareholder is entitled to one vote per share held as of the record
date. Shareholders will not be allowed to cumulate their votes in the election
of Directors.
The Board of Directors has nominated Eric S. Olberz for election as the
Class 1 Director at this Meeting to serve for a three-year term expiring at the
annual meeting in 2002 or until his successor is elected and qualified. Mr.
Olberz currently is serving as a Director and has consented to serve for a new
term.
The persons named in the enclosed form of Proxy, unless otherwise
directed therein, intend to vote such Proxy for the election of Eric S. Olberz
as a Class 1 Director for the term specified. The Proxies may also be voted for
a substitute nominee in the event Eric S. Olberz shall be unable to serve for
any reason or be withdrawn from nomination, a contingency not now anticipated.
The following table, together with its footnotes, presents information
regarding the age, occupation, business experience furnished by Mr. Eric Olberz.
TABLE 1
CERTAIN INFORMATION REGARDING NOMINEE DIRECTOR
----------------------------------------------
<TABLE>
<CAPTION>
Term to Director
Director's Name Age Expire(1) Class Occupation/Background (1)
- --------------- --- --------- ----- -------------------------
<S> <C> <C> <C> <C>
Eric S. Olberz 36 2002 1 Director since 1992. Mr. Olberz recently
received a Bachelors Degree with an emphasis in
accounting from National University and sat for
the Certified Public Accountants Examination.
He intends to seek a staff accountant position
with a public accounting firm. Mr. Olberz was
President and owner of Camp 7, Inc., a soft
goods manufacturing operation located in Santa
Ana, California from July 1995 through October
1996 and Vice Chairman of the Company from
October 1994 to July 1995, Vice President from
1984 through October 1994 and Secretary from
October 1992 to July 1995. Mr. Olberz resigned
as an officer and employee concurrently with
Camp 7, Inc.'s acquisition of the Company's soft
goods manufacturing operations in July 1995.
Mr. Olberz is the son of Norbert J. Olberz, the
Principal Shareholder.
</TABLE>
- ------------------------------------
(1) Based on information provided to the Company by the Nominee.
The Board of Directors recommends that the Shareholders vote for the election as
Director, the Nominee listed above.
2
<PAGE>
Other Directors
The following persons will continue to serve as Directors of the Company
after the Meeting until their terms of office expire (as indicated below) or
until they resign or their successors are elected and qualified:
TABLE 2
CERTAIN INFORMATION REGARDING DIRECTOR NON-NOMINEES
---------------------------------------------------
<TABLE>
<CAPTION>
Term to Director Positions With the Company
Director's Name Age Expire(1) Class and Principal Occupation (2)
- --------------- --- -------- ----- ----------------------------
<S> <C> <C> <C> <C>
John R. Attwood 68 2000 2 Director and Chairman of the Compensation
Committee since February 1993. Mr.
Attwood is the President of Attwood
Enterprises, a consulting business. He was the
former Chairman of Coca-Cola Bottling of Los
Angeles and Senior Vice President and a
Group President at Beatrice Companies, Inc.,
the parent company of Coca-Cola Bottling of
Los Angeles, until his retirement in 1986. Mr.
Attwood currently serves on the board of
directors of Verdugo Hills Hospital, a non-
profit organization.
Craig L. Levra 40 2000 2 Director since November 1998 and President
and Chief Operating Officer since November
1997. Prior to joining the Company, Mr.
Levra had been employed by The Sports
Authority, the nation's largest sporting goods
retailer. During his five year tenure with that
company, he held positions of increasing
responsibility in merchandising and operations
and was Vice President of Store Operations at
the time of his departure. Mr. Levra has an
extensive retail background having worked for
several major retail chains including the
HomeClub (the predecessor to HomeBase) and
the All-American SportsClub. Mr. Levra
received Bachelors Degree and a Masters
Degree in Business Administration from the
University of Kansas.
Norbert J. Olberz 74 2001 3 The Company's founder and Chairman of the
Board since it was founded in 1959, Interim
President from April 1995 through November
1997 and Interim Chief Executive Officer since
April 1995.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Kenneth Olsen 81 2001 3 Mr. Olsen has been a Director of the Company
and Chairman of the Audit Committee since
June 1994. He served as President and Chief
Executive Officer of the Vons Company, Inc.,
a leading grocery store chain, from 1974 to
1983, at which time he retired from full-time
responsibilities after thirty-eight years with that
company. Mr. Olsen currently serves as a
director of several nonprofit organizations and
is a management consultant advising national
and international firms on marketing and
merchandising consumer products.
</TABLE>
- ----------------------
(1) Fiscal year during which term expires.
(2) Based on information provided to the Company by each Director.
Meetings and Committees of the Board of Directors
The Board formally met five times during the last fiscal year. The Board's
Audit and Compensation Committees, each currently comprised of non-employee
Directors Attwood, Olsen and Eric S. Olberz, met twice during the fiscal year
ended March 31, 1999. Each Director attended each of the Board and Committee
meetings, as appropriate. The Directors also met informally with the Company's
management during that fiscal year.
The Audit Committee, among other things, nominates the independent
auditors, reviews the financial statements and the report of independent
auditors, and reviews the scope and results of the Company's accounting
practices and internal accounting procedures. The Compensation Committee is
responsible for reviewing and recommending to the full Board of Directors the
material terms for executive officer employment and severance contracts and
annual compensation levels for executive officers not otherwise set by contract,
administering the Company's 1992 Plan, establishing and periodically reviewing
the Company's policies regarding non-officer employee compensation and benefit
policies and other matters related to compensation and evaluation of Company
personnel.
Compensation of Directors
A. Cash Compensation. Directors who are employees of the Company are
compensated as officers of the Company and receive no separate compensation for
serving as Directors. Non-employee Directors receive an $18,000 annual retainer
for attending or participating in up to six formal Board and/or Committee
meetings during the fiscal year plus an additional $3,000 for each additional
day they attend or participate in formal Board and/or Committee meeting(s) and
$750 for each day that they attend or participate in an informal meeting with
the Company's management. Directors also may receive reimbursement of expenses
in attending meetings. For the fiscal year ended March 31, 1999, each non-
employee Director received as a Director $18,000 in fees for attending formal
meetings and $750 in additional fees.
In addition, Directors Attwood and Olsen have and will continue to advise
the Company regarding various areas in which they have significant professional
experience. These advisory services are in addition to the services performed
as Directors and, accordingly, each Director performing advisory services will
be entitled to additional compensation in an amount to be negotiated from time
to time by such Director and the Company and approved by a majority of the
disinterested Directors (i.e., those not performing advisory services) in
conformity with the Company's policies on conflicts of interest. For the fiscal
year ended March 31, 1999, Directors Attwood and Olsen received $3,100 and
$2,500, respectively, in compensation for services provided as a consultant.
4
<PAGE>
B. Directors' Stock Option Plan. Under the amended 1992 Plan, which is
described in detail later in this Proxy Statement, each non-employee Director
currently is granted automatically upon becoming a Director, Automatic Option
Grants ("AOGs") to purchase 5,000 shares of Common Stock at the fair market
value on the grant date. On each triennial date on which a non-employee
Director is reelected to the Board, AOGs for an additional 5,000 shares will be
automatically granted to the Director subject to an aggregate limit for any one
non-employee Director of options to acquire a total of 30,000 shares. All AOGs
are exercisable one-third upon grant and one-third on each of the first and
second anniversaries of the date of initial grant and all expire five years from
the date of grant. Prior to its amendment on August 6, 1998, the 1992 Plan had
provided that AOGs representing 3,000 shares would be granted to a non-employee
Director upon his or her election or reelection. In accordance with the terms
of the 1992 Plan, Directors Olsen, Attwood and Eric S. Olberz each have been
granted AOGs representing 11,000, 9,000 and 6,000 shares, respectively.
C. Principal Shareholder's Award Plan. Directors, other than Norbert J.
Olberz, participate in the "Principal Shareholder's Award Plan" described below.
The Directors received no compensation or awards from the Principal
Shareholder's Award Plan during the fiscal year ended March 31, 1999.
Executive Officers
The following persons are currently key executive officers of the Company
who are not identified in the Sections captioned "Election of Directors-
Nominees" or "Other Directors" and are "Named Officers" for purposes of the
Summary Compensation Table set forth below.
TABLE 3
CERTAIN INFORMATION REGARDING KEY OFFICERS
------------------------------------------
<TABLE>
<CAPTION>
Key Officer's Name Age Position With the Company and Background
------------------ --- ----------------------------------------
<S> <C> <C>
Dennis D. Trausch 49 Executive Vice President since June 1988. Since joining the Company in
1976, Mr. Trausch has served in various positions starting as a salesperson
and assuming positions of increasing responsibility in store and Company
operations. He oversees all store and distribution center operations
including human resources and customer service, as well as being
responsible for site selection and leasing.
Howard K. Kaminsky 41 Chief Financial Officer since joining the Company in 1985, Senior Vice
President-Finance since April 1997 and Secretary since July 1995. Mr.
Kaminsky was also the Company's Vice-President-Finance from January
through April 1997 and Treasurer from October 1992 through January
1997. Prior to joining the Company, Mr. Kaminsky was employed in the
auditing division of Ernst & Young LLP. He is a Certified Public
Accountant and received his Bachelor of Science degree in Business
Administration from California State University, Northridge. Mr.
Kaminsky is a member of the California Society of Certified Public
Accountants and the Retail Financial Executives Professional Association.
Ronald G. Mann 48 Senior Vice President-General Merchandise Manager since August 1998.
Before joining the Company, Mr. Mann had been employed at the large
sporting goods retailer Big 5 Corp. since 1976, where he held positions of
increasing responsibility in operations and merchandising and was the
Assistant Merchandise Manager at the time of his departure. Mr. Mann
had received his Bachelor of Arts degree from California State University,
Northridge immediately prior to joining Big 5.
</TABLE>
5
<PAGE>
Employment Agreements and Termination Arrangements
The Company's policy now is to enter into formal employment or severance
contracts with its executive officers.
The employment contract with Mr. Levra initially was for a period of
approximately two years, terminating on October 31, 1999, and by its terms has
been extended until October 31, 2000. Mr. Levra initially received an annual
$200,000 salary, is entitled to increases in salary as the Board Directors may
determine at its sole discretion, and participates in the executive officer
bonus program. Mr. Levra received a $100,000 signing bonus and 100,000 in non-
qualified stock options ("NQSOs"). Mr. Levra is entitled to the fringe benefits
provided other Company executive officers including, without limitation,
vacation pay, sick leave and reimbursement of certain business expenses.
Pursuant to the employment agreement, the Company also paid certain of Mr.
Levra's moving and relocation expenses. In the event Mr. Levra is terminated
other than "for cause", he will be entitled to monthly severance payments for
what would be the remaining employment term had he not been terminated in the
amount of 8.333% of his then annual base salary.
The Employment Contract with Mr. Mann is automatically renewed for
succeeding one month periods until notice of termination is provided either by
the Company or Mr. Mann. Under the contract, Mr. Mann was granted NQSOs
representing 35, 000 shares, a stock award of 5,000 shares as a signing bonus
and an annual $160,000 salary, subject to any increases as the Board of
Directors may determine in its sole discretion. If Mr. Mann is terminated
during the initial term of his employment contract other than by reason for
cause, he will be entitled to receive as severance equal to twelve (12) months
salary, provided that Mr. Mann enters into the Company's Standard Severance
Agreement and Release and satisfies other conditions.
The Company's practice is to enter into formal Severance and General
Release Agreements with departing executive officers. On March 16, 1999, the
Company and Robert W. Haueter, the former Senior Vice President-Marketing and
Advertising, entered into an Agreement whereby the Company (i) paid severance
benefits equal to $70,000 (less tax withholding and other deductions), (ii) will
continue certain insurance benefits as required by law (iii) paid a full bonus
of $45,000 for the fiscal year ended March 31, 1999, (iv) paid $10,800 in unpaid
accrued vacation and (v) modified a Promissory Note with an unpaid $32,000
balance representing a loan to Mr. Haueter for taxes due and paid by the Company
on behalf of Mr. Haueter with respect to stock award received by him under the
Principal Shareholder's Award Plan described below, to provide for monthly
payments of $467.00 beginning April 1, 1999. The 15,000 shares of Company
Common Stock received by Mr. Haueter under the Principal Shareholder's Award
Plan will remain subject to restrictions imposed under that Plan until May 22,
2000 and shall continue to be pledged as collateral for payments of amounts due
under the modified Promissory Note. The non-vested portion (60,000 shares) of
the 105,000 shares of Common Stock subject to the NQSOs held by Mr. Haueter were
forfeited while the remaining options representing 45,000 shares were exercised
on April 15, 1999. Under the terms of the Severance has agreed not to trade in
the Company's Common Stock until October 16, 1999.
Ownership of Shares By Certain Beneficial Owners
The following table, with footnotes, reflects the Company's best knowledge
based on information filed with the Securities and Exchange Commission (the
"Commission") and information provided directly by the persons named below, of
certain information as of June 11, 1999 regarding the amount of Common Stock
beneficially owned by each Director and Director Nominee of the Company, each
executive officer that is a "Named Officer" (see the discussion under the
caption "Summary Compensation"), all such Directors and executive officers as a
group and by each holder of more than five percent of the outstanding shares of
the Company's Common Stock. All shares shown in the table reflect sole voting
and investment power.
6
<PAGE>
TABLE 4
BENEFICIAL OWNERSHIP OF COMMON STOCK
<TABLE>
<CAPTION>
Shares
Name and Address Beneficially Percent
of Beneficial Owner Position with Company Owned of Class
------------------- --------------------- ------------ ---------
<S> <C> <C> <C>
Norbert J. Olberz Chairman of the Board 4,372,617 65%
920 Foothill Boulevard and
La Canada, California 91011 Interim Chief Executive
Officer
John R. Attwood Director 16,000(1) *
200 West Glenoaks Boulevard
Glendale, California 91202
Eric S. Olberz Director 273,403(2) 4.0%
920 Foothill Boulevard
La Canada, California 91011
Kenneth Olsen Director 20,767(3) *
920 Foothill Boulevard
La Canada, California 91011
Craig L. Levra Director, President and 50,000(4) *
920 Foothill Boulevard Chief Operating Officer
La Canada, California 91011
Dennis D. Trausch Executive Vice President 78,686(5) 1.2%
920 Foothill Boulevard
La Canada, California 91011
Howard K. Kaminsky Senior Vice President - 85,606(6) 1.3%
920 Foothill Boulevard Finance, Chief
La Canada, California 91011 Financial
Officer, and Secretary
Ronald G. Mann Senior Vice President - 5,000(7) *
920 Foothill Boulevard General Merchandise
La Canada, California 91011 Manager
Robert W. Haueter Former Senior Vice 63,455 *
920 Foothill Boulevard President-Marketing and
La Canada, California 91011 Advertising(8)
</TABLE>
____________________________
* Represents less than one percent
(1) Includes vested AOGs to purchase 8,000 shares of Common Stock and does not
include non-vested AOGs granted to Director Attwood to purchase 1,000
shares of Common Stock.
(2) Includes vested AOGs to purchase 6,000 shares of Common Stock.
(3) Includes vested AOGs to purchase 7,667 shares of Common Stock and does not
include non-vested AOGs granted to Director Olsen to purchase 3,333 shares
of Common Stock.
(4) Includes vested NQSOs to purchase 25,000 shares of Common Stock and does
not include non-vested NQSOs granted to Mr. Levra to purchase 200,000
shares of Common Stock.
(5) Includes vested NQSOs to purchase 52,200 shares of Common Stock and does
not included non-vested NQSOs granted to Mr. Trausch for 84,800 shares of
Common Stock.
(6) Includes vested NQSOs to purchase 53,200 shares of Common Stock and does
not include non-vested NQSOs granted to Mr. Kaminsky to purchase 88,800
shares of Common Stock.
(7) Does not Include non-vested NQSOs granted to Mr. Mann to purchase 65,000
shares of Common Stock.
(8) Resigned on March 16, 1999. See "Employment Agreements and Termination
Arrangements."
7
<PAGE>
Insider Participation in Compensation Decisions
The Compensation Committee Report on executive compensation is set forth in
the following section below. As previously mentioned, the Compensation
Committee currently is comprised of three non-employee Directors of the Company,
Directors Attwood, Olsen and Eric S. Olberz. Only Eric S. Olberz is a former
officer or employee of the Company or any of its subsidiaries or affiliates.
See Table 1 - "Certain Information Regarding Nominee Director" and Table 2 -
"Certain Information Regarding Director Non-Nominees."
The Compensation Committee makes recommendations to and reviews in detail
aspects of executive compensation with the full Board of Directors, which has
the ultimate responsibility for all compensation decisions. During fiscal year
ended March 31, 1999, the Principal Shareholder and Craig L. Levra, President
and Chief Operating Officer, in addition to the members of the Compensation
Committee, served on the Board of Directors.
Compensation Committee Report of the Board of Directors
The Compensation Committee of the Board of Directors ("Committee") has
provided the following report on executive compensation.
A. Compensation Policy and Executive Compensation
This Committee is responsible for reviewing and making recommendations as
to the annual compensation of the Company's executive officers, including such
components as annual cash compensation, short and long term incentives, and
supplemental benefits.
The Company's compensation policy is based on linking executive
compensation to the Company's objectives of growth through increased earnings
and maximizing long-term shareholder value. This policy traditionally has been
carried out through a compensation program consisting of salaries and short and
long term incentives. The Committee monitors compensation levels for comparable
retail companies and evaluates annual compensation on the basis of these
compensation trends and the performance of the Company in order to determine
whether adjustments to base salaries and bonuses, or both, are appropriate.
Departing from its former practices, the Company has in recent years,
entered into formal written employment agreements at time of hire with its
executive officers. Accordingly, it currently has such contracts with its
President and Chief Operating Officer, Craig Levra, and its Senior Vice
President, General Merchandise Manager, Ronald G. Mann. (See the discussion
above under the section captioned "Employment Agreements and Termination
Agreements".) The Committee is currently considering the terms and conditions
under which the opportunity to enter into similar agreements will be extended to
executive officers who were hired by the Company at a time when such agreements
were not being offered.
The Company's recent practice has been to enter into formal severance
agreements with departing executives as was the case with Mr. Haueter who
resigned on March 16, 1999. See "Employment Agreements and Termination
Arrangements" above. The various elements of the Company's overall compensation
program are more fully discussed below.
B. Annual Salary and Bonus
Annual compensation for Messrs. Olberz, Levra, Trausch, Kaminsky, Mann and
Haueter (collectively, the "Executive Management Group") consists of a base
salary and an annual bonus. During the fiscal year ended March 31, 1999, the
annual base salaries for Messrs. Olberz, Levra, Trausch, Kaminsky and Mann
respectively, were $300,000, $200,000, $170,000, $170,000, and $160,000. During
Fiscal 1999, Mr. Haueter's base salary was reduced from $154,000 to $140,000
because a portion of his responsibilities were assumed by Mr. Mann. The
Committee has used the service of the Compensation Resource Group to survey and
provide information on market conditions. Based on such information, the
Committee believes that the base salaries for the Executive Management Group, as
compared with the base salary for similar executives surveyed, is at or below
the surveyed market average. For the fiscal year ended March 31, 2000, their
base salaries will remain unchanged; however, Messrs. Levra, Trausch, Kaminsky
and Mann were granted additional NQSOs in order to place greater focus on
linking executive compensation to long-term growth and shareholder
value.Starting in fiscal 1996, the Company adopted a bonus plan under which,
subject to an overall maximum, the executive officers earn a bonus as a
percentage of their base compensation, if the Company meets the pre-tax profit
objective set by the Committee at the beginning of the fiscal year. If the
profit objective is met or exceeded, the Interim CEO, COO, EVP, CFO and Senior
VP-General Merchandise Manager each are entitled to receive a bonus equal to
45%, 50%, 35%, 35% and 30%, respectively, of their annual base compensation. If
90% or more, but less than 100% of the profit objective is achieved, these
executives receive 50% of a full annual bonus plus 5% for each full percentage
point above 90% achieved. During fiscal 1999, the profit objective was exceeded
and each of above
8
<PAGE>
identified executives earned a full bonus. The summary of the base salaries and
bonuses paid to the Executive Management Group during the last three years is
set forth in the Summary Compensation Table (Table 5).
While a significant portion of the overall annual compensation package
continues to be based on a bonus program tied to the Company's earnings
performance, an overall cap is placed on the maximum bonus which is paid
annually to each executive. Nevertheless, the Committee believes the base
salaries, while at or below market average, are sufficiently competitive to
allow the Company to attract and retain well-qualified executives. Survey
results support the Committee's conclusion that while executive base salaries
are still below the competitive market, if the Company performs to profit levels
similar to those achieved in Fiscal 1999, the Executive Management Group's total
compensation under this program falls within an acceptable range of industry
averages for the defined labor market.
C. Longer-Term Compensation
On April 15, 1999, Messrs. Levra, Trausch, Kaminsky and Mann were granted
NQSOs for 100,000, 20,000, 20,000 and 20,000 shares of Common Stock,
respectively, which vest at the rate of 33 1/3 % per year over three years.
Messrs. Levra, Trausch, Kaminsky and Mann also hold NQSOs for 125,000, 117,000,
122,000 and 45,000 shares of Common Stock, respectively, exercisable at the
market price on the grant date and vesting at a rate of 20% per year over five
years. The Committee believes NQSOs provide a valuable incentive to achieve
long-term growth and maximum shareholder value by linking compensation benefits
to the long-term growth in the Company's stock value. More specific information
on option grants is set forth in the discussion under the caption "Incentive
Compensation Plans" following this Report and shown in Tables 5, 7 and 8 below
of this Proxy Statement.
The Committee believes that it is inappropriate for the Company at this
time to offer its key executives supplemental benefit programs. Instead, the
focus will remain on a short-term and long-term incentive based program in order
to achieve the Company's objectives of a greater earnings capacity and long-term
growth in share value. The Compensation Committee will continue to review the
Company's overall executive compensation program periodically and, if
appropriate, adjust existing compensation levels or policies in order to meet
market demands or changing corporate objectives.
D. Chief Executive Officer Compensation
The Committee believes that the $300,000 base salary paid to Mr. Olberz as
Chairman and Interim Chief Executive Officer during fiscal 1999 should remain
unchanged for fiscal 2000, and is reasonable when compared to the comparable
companies whose chairmen are actively involved in day to day operations. His
participation in the executive bonus program appropriately exemplifies the
Company's pay-for-performance philosophy, since the value of this element of his
compensation package will be determined by the Company's profitability during
the period he serves as the Company's Interim Chief Executive Officer. However,
Chairman Olberz has not been provided with any longer-term incentives, because,
in the Committee's view, his significant stock holdings in the Company already
provide sufficient motivation for him to achieve long-term profitability and
maximum shareholder value.
The profit objective for fiscal 1999 established by the Compensation
Committee at the beginning of the year was pre-tax $7.1 million. The Company
exceeded this objective with a pre-tax profit of $9.0 million. Accordingly,
Mr. Olberz became entitled to a full bonus of 45% of his base compensation, or
$135,000. In view of the extraordinary performance achieved by the Company in
fiscal 1999, the Committee recommended and the Board granted to Mr. Olberz a
performance bonus of $65,000. Thus, Mr. Olberz' total compensation for fiscal
1999 was $500,000, of which $135,000 was by way of incentive bonus and $65,000
by way of performance bonus.
E. Tax Deductibility Of Executive Compensation
The Internal Revenue Code of 1986 was amended in 1993 in order to limit the
deductibility for federal income tax purposes of non-performance based
compensation in excess of $1,000,000 provided to certain executive officers. As
the Company's current compensation structure does not provide for or contemplate
annual compensation to any executive in excess of the $1,000,000 threshold, the
limitations placed on tax deductions will be inapplicable to the Company in the
foreseeable future.
Compensation Committee
JOHN R. ATTWOOD
ERIC S. OLBERZ
KENNETH OLSEN
June 29, 1999
9
<PAGE>
Incentive Compensation Plans
In October 1992, the Board adopted the 1992 Plan which authorized the
granting of certain incentive awards including Stock Appreciation Rights
("SARS"), NQSOs, incentive stock options ("ISOs"), AOGs to non-employee
Directors, restricted stock, dividend equivalents, and performance awards. The
Plan was amended August 6, 1998.
A total of 1,200,000 shares of Common Stock currently are authorized and
reserved for awards to be granted under the 1992 Plan. The 1992 Plan provides
for the grant of ISOs as defined in Section 422 of the Internal Revenue Code of
1986, as amended, to employees of the Company. The 1992 Plan also provides for
the grant of NQSOs to the Company's officers, employees or consultants thereof.
An ISO may have certain tax advantages for the optionee as compared to a NQSO.
The exercise price of the ISOs may not be less than 100% of the fair market
value of the Company's Common Stock on the date of grant or 110% of such fair
market value in the case of holders of more than 10% of the Company's Common
Stock. The exercise price of the NQSOs may not be less than 100% of the in fair
market value of the Company's Common Stock on the grant date. Shares subject to
an option granted under the 1992 Plan may be purchased for cash and/or its
equivalent, including shares of Common Stock. The ISOs and NQSOs expire ten
years after the grant date, with the exception of ISOs held by a holder of 10%
or more of the outstanding Common Stock, which expire five years after the grant
date.
The Board of Directors authorized the issuance on March 1, 1996 of NQSOs to
certain of the Company's officers and these officers, including Messrs. Trausch,
Kaminsky and Haueter, agreed to terminate the existing NQSOs that they had
received prior to the Company's initial public offering in November, 1992.
Messrs. Trausch, Kaminsky and Haueter received NQSOs for 72,000, 72,000 and
60,000, respectively, under this grant. Craig L. Levra and Ronald G. Mann were
granted NQSOs representing 100,000 and 45,000 shares, respectively, in
connection with their initial employment by the Company. On February 4, 1998,
NQSOs were granted representing 225,000 shares to the Company's executive
officers and other key personnel. Of this amount, NQSOs for 25,000, 45,000,
50,000 and 45,000 shares were granted to Messrs. Levra, Trausch, Kaminsky and
Haueter, respectively. In addition, Mr. Levra was awarded 25,000 shares of
Common Stock. On April 15, 1999, additional NQSOs of 100,000, 20,000, 20,000
and 20,000 shares were granted to Messrs. Levra, Trausch, Kaminsky and Mann,
respectively. The Board of Directors authorized additional NQSOs for 127,000
shares to be issued to other key employees. Mr. Haueter forfeited NQSOs
representing 60,000 shares in connection with his resignation and exercised
other outstanding NQSOs representing 45,000 shares on April 15, 1999.
Under the 1992 Plan, a total of 101,000 shares of Common Stock have been
reserved for grant of AOGs to non-employee Directors of the Company, of which
AOGs for 75,000 shares remain unallocated as of the date of this Proxy
Statement. AOGs granted to Board of Directors members are discussed herein
under the Section captioned "Compensation of Directors."
As of the date of this Proxy Statement, 862,000 shares have been utilized
under the 1992 Plan, leaving 338,000 shares unallocated.
Beginning in fiscal 1997, eligible employee participants could make
voluntary contributions to an employee retirement savings plan under Section
401(k) of the Internal Revenue Code 1986 as amended (the "401K Plan") through
payroll deductions which are matched, in part, by the Company's contributions.
Such contributions can be utilized by the participant to purchase interests in
certain mutual funds or shares of the Company's Common Stock.
Each employee is eligible to participate in the 401K Plan on the first day
of the pay period coincident with the semi-annual eligibility computation period
during which he or she shall perform at least 1,000 hours or one year of
service. There are currently approximately 400 employees of the Company who are
eligible to participate in the 401K Plan. Subject to compliance with certain
nondiscrimination tests which limit contributions of or on behalf of "highly
compensated employees" (as such term as defined in the federal tax laws), the
eligible employee may make an annual contribution equal to from 2% up to and
including 15% of their salary compensation. The Company will make a matching
contribution of 25% of the first 4% of an eligible employee's compensation. The
maximum investments of any plan participant in company stock cannot exceed 25%
of their total deferral contributions.
On March 31, 1998, the Company and the Olberz Family Trust established the
Olberz Family Trust Sport Chalet Restricted Stock Award Plan ("Olberz Plan"),
pursuant to which the Olberz Family Trust transferred 293,625 unregistered
shares of the Company's Common Stock to the Olberz Plan and the Olberz Plan
concurrently awarded the shares to qualified employees and certain Directors of
the Company. For further details see the discussion under the caption
"Principal Shareholder's Award Plan".
10
<PAGE>
Summary Compensation Table
The following table sets forth, for the 1999, 1998, and 1997 fiscal years,
the cash compensation paid or accrued by the Company, as well as other
compensation paid or accrued for such year, as to the Company's Chief Executive
Officer during this period, Norbert J. Olberz, and to each of the other key
executive officers (collectively "Named Officers") for which disclosure is
required.
TABLE 5
SUMMARY COMPENSATION TABLE
--------------------------
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation Awards
----------------------------------------- ----------------------------------------------
All Other
Name and Principal Position Fiscal Year ($) Salary ($) Bonus(1) (#) Options/SARS(2) Compensation
--------------------------- ----------- ------------- ------------ ------------------- ----------------------
<S> <C> <C> <C> <C> <C>
Norbert J. Olberz, Chairman 1999 300,000 200,000 -0- -0-
of the Board and Interim Chief 1998 275,000 124,000 -0- -0-
Executive Officer 1997 250,000 125,000 -0- -0-
Craig L. Levra, President and 1999 200,000 100,000 -0- -0-
Chief Operating Officer 1998 186,923(3) 42,000 125,000 118,700(4)
Dennis D. Trausch, Executive 1999 170,000 59,500 -0- -0-
Vice President 1998 160,000 56,000 45,000 125,000(5)
1997 145,000 52,000 -0- -0-
Howard K. Kaminsky, Senior 1999 170,000 59,500 -0- -0-
Vice President-Finance, Chief 1998 160,000 56,000 50,000 100,000(5)
Financial Officer, and Secretary 1997 135,000 52,000 -0- -0-
Ronald G. Mann, Senior 1999 160,000 42,000 45,000 32,500(6)
Vice President-General
Merchandise Manager
Robert W. Haueter, Former 1999 226,462(7) 45,000 -0- -0-
Senior Vice President-Sales, 1998 150,000 50,000 45,000 75,000(5)
Marketing, and Merchandising 1997 120,000 48,000 -0- -0-
</TABLE>
____________________________
(1) All named executive officers were entitled to receive bonuses based on the
Company's net income for the fiscal year.
(2) Represents NQSOs issued to certain key executive officers during fiscal
1998. Additional NQSOs were granted to Messrs. Levra, Trausch, Kaminsky
and Mann after the end of the 1999 fiscal year, on April 15, 1999. See the
discussion above under the heading "Incentive Compensation Plans."
(3) Includes a $100,000 signing bonus paid upon joining the Company in November
1998.
(4) Represents the fair market value on the grant date of 25,000 shares awarded
to Mr. Levra. See the discussion above under the heading "Employment
Agreements and Termination Agreements".
(5) Represents the fair market value on the grant date of shares awarded by the
Principal Shareholder to Messrs. Trausch, Kaminsky and Haueter for 25,000,
20,000 and 15,000 shares of Common Stock, respectively.
(6) Represents the fair market value on the grant date of 5,000 shares awarded
to Mr. Mann. See the discussion above under the heading "Employment
Agreements and Termination Agreements."
(7) Mr. Haueter resigned as an Executive Officer and employee on March 16,
1999. The amount as shown includes a severance and other payments of
$80,800. See the discussion above under the heading "Employment Agreements
and Termination Agreements."
11
<PAGE>
PERFORMANCE GRAPH
TABLE 6
The following graph shows a comparison of the Company's total return to
shareholders for the last five fiscal years on an initial investment of $100.00
as compared to total return for the MG Industry Group 74 Index (Specialty
Retailors) and the NASDAQ Market Index for the same period.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
COMPANY/INDEX/MARKET 3/31/94 3/31/95 3/29/96 3/31/97 3/31/98 3/31/99
- ----------------------------------------------------------------------------------------------
Sport Chalet Inc. 100.00 88.89 50.00 55.56 111.11 125.00
- ----------------------------------------------------------------------------------------------
Specialty Retail Peer Group 100.00 88.98 100.48 94.28 112.34 98.70
- ----------------------------------------------------------------------------------------------
NASDAQ Market Index 100.00 106.09 142.70 159.64 241.26 315.28
==============================================================================================
</TABLE>
12
<PAGE>
OPTIONS GRANTED IN FISCAL 1999
The following sets forth certain information concerning the grants and
stock options under the 1992 Plan to the Named Officers during Fiscal 1999. No
other stock options were granted to such Named Officers during this period.
Under the terms of the 1992 Plan, the Compensation Committee retains discretion,
subject to Plan limits, to modify the terms of outstanding options and to
reprice the options.
TABLE 7
<TABLE>
<CAPTION>
Potential Relizable
Individual Grants Value at Assumed
%of Annual Rates of
Total Options Stock Price
Granted to Appreciation for
Options Employees in Exercise Price Expiration Option Term
Name Grated (#)(1) Fiscal 1999(2) ($/Sh)(3) Date 5%(4) 10%(4)
- ---- ------------- ----------------- -------------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Ronald G. Mann 45,000 100% 6.50 8/5/09 183,952 466,170
</TABLE>
_____________________
(1) Represents NQSOs which vest at a rate of 20% per year after grant over 5
years. Upon certain changes of control of the Company or the Shareholders
approve a reorganization, merger, consolidation, liquidation, or
dissolution of the Company or similar transactions, the holder of an NQSO
shall have the right to exercise such option to the full extent not
theretofore exercised.
(2) Based on aggregate NQSOs representing shares of Common Stock granted during
Fiscal 1999. See the discussion under the heading "Incentive Compensation
Plans" for a description of NQSOs issued on April 15, 1999.
(3) All options were granted at the Company's closing stock price for its
Common Stock on the National Market System as reported by the NASDAQ on the
grant date.
(4) Calculated over a ten year period representing the term of the NQSOs.
13
<PAGE>
OPTION EXERCISES AND YEAR END VALUE
The following tables sets forth information with respect to the Named Officer
concerning the unexercised options held at the end of Fiscal 1999.
TABLE 8
Aggregated Option Exercises in Fiscal 1999 and Fiscal 1999 Year-End Option
Values
<TABLE>
<CAPTION>
Number of Value of Unexercised
Unexercised Options In-the-Money Options at
Held at Fiscal Year End(#) Fiscal Year End (1)
Shares Acquired Value -------------------------- -------------------
Name on Exercise (#) Realized Exercisable/Unexercisable Exercisable/Unexercisable
--------------- --------
<S> <C> <C> <C> <C>
Norbert J. Olberz -0- -0- 0/0 N/A
Craig L. Levra -0- -0- 25,000/100,000 29,375/117,500
Dennis D. Trausch -0- -0- 52,200/64,800 148,275/125,100
Howard K. Kaminsky -0- -0- 53,200/68,800 149,150/128,600
Ronald G. Mann -0- -0- 0/45,000 0/0
Robert W. Haueter 45,000 $71,438 0/0 0/0
</TABLE>
- ------------------------------
(1) Represents the difference between the closing price of the Company's Common
Stock on March 31, 1999 in excess of the exercise price of the options
multiplied by the number of shares subject to exercisable and unexercised
options, respectively. Does not include NQSOs granted certain Executive
Officers on April 15, 1999.
CERTAIN TRANSACTIONS
From time to time the Company has transacted business with entities in
which the Principal Shareholder of the Company has an interest.
Property Leases
The Company leases from corporations controlled by the Principal
Shareholder its corporate office space in La Canada, its warehouse and
distribution facility in Montclair, and its stores in La Canada and Huntington
Beach. The Company has incurred rental expense of $1.7 million, $1.5 million and
$1.5 million payable to the Principal Shareholder or his affiliated corporations
in Fiscal 1999, 1998, and 1997, respectively.
During fiscal year 1998, the Company's non-employee Directors approved a
proposal to relocate and expand the La Canada store and corporate offices
currently leased from La Canada Properties, Inc., a California Corporation under
the control of the Principal Shareholder, to the "Sport Chalet Village," a
shopping center in La Canada currently under development by La Canada
Properties, Inc. The development of the shopping center, however, has been
indefinitely delayed as a result of the problems experienced by La Canada
Properties, Inc. in obtaining permits and entitlements from the City of La
Canada. Assuming the Sport Chalet Village project proceeds forward on a timely
basis, the existing lease for the La Canada store and corporate offices will be
terminated and under a new lease, the new rental rate during the initial
fifteen-year lease term for the store will be the amount by which four percent
times monthly gross sales exceeds the $54,250 monthly minimum rent which is
expected to be less, on a per square foot basis, than under the old store lease.
The new store will be 50,000 square feet and, subject to necessary government
approvals, an outdoor pool area of approximately 1,500 square feet. The new
office rental rate will be $10,850 per month compared to $4,500 under the old
lease. The new office will be 20,000 square feet, compared to the current
10,000 square feet facility. Management believes that the new facilities if
built will result in improved operational efficiencies because the site will be
larger and all functions will be housed under one roof.
14
<PAGE>
In fiscal 1999, the Company's non-employed directors also approved a lease
for a new store expected to open during Summer 1999 in Porter Ranch, California.
The store will be built and owned by North San Fernando Valley Properties, Inc.,
a California corporation, under the control of the Principal Shareholder. The
rental rate for the store will be the amount by which 4 percent times monthly
gross sale exceeds the $49,000 monthly minimum rent. The store will be
approximately 42,000 square feet.
Management believes that the occupancy costs under the leases with
corporations controlled by the Principal Shareholder described above are or will
be no higher than those which could be charged by an unrelated third party under
similar circumstances.
Principal Shareholder's Award Plan
Effective March 31, 1998, the Principal Shareholder and his wife Irene,
through their family trust, committed 293,625 shares of the Company's common
stock owned by them for awards to more than 100 employees and Directors pursuant
to the terms of that certain Olberz Family Trust Sport Chalet Restricted Stock
Plan (the "Olberz Plan"). Under the Olberz Plan, selected employees and
Directors will each be awarded a portion of these shares. All such awards
require no consideration to be paid by the recipient, but are subject to the
restrictions contained in the Olberz Plan. These awards have been made by Mr.
Olberz in appreciation and recognition of and to reward recipients for their
loyalty and service to the Company. The shares so granted, while of the same
class as the Company's registered Common Stock, are unregistered. Accordingly,
their subsequent transferability is subject to applicable Federal and State
securities laws, including, without limitation, compliance with Securities
Exchange Commission Rule 144 as well as the private restrictions imposed by the
Olberz Plan. Such private restrictions include prohibition against transfer for
two years and potential forfeiture in the event certain employment conditions
are not fulfilled. Further, for federal tax purposes, the transaction will more
likely than not be treated as a contribution to capital of the Company and a
payment of compensation by the Company to the recipients to the extent of the
fair market value of the stock so awarded, resulting in a tax benefit to the
Company. In recognition of both the financial and employee incentive benefits
to the Company from these awards, the Company has agreed to pay the costs of
administration, implementation and enforcement of the Olberz Plan. Messrs.
Trausch, Kaminsky and Haueter received 25,000, 20,000, and 15,000 shares under
the Olberz Plan, respectively, on March 31, 1998. Messrs. Levra and Mann have
not received any stock awards. Directors Attwood, Olsen and Eric S. Olberz
each were awarded 6,000 shares on March 31, 1998. Other shares were awarded to
qualified employees of the Company based on the responsibilities of the eligible
employee, the value of the employees services to the Company, the employees
tenure with the Company and other factors deemed pertinent by the Committee
responsible for administering the Olberz Plan.
GENERAL
Required Commission Filings
Based on Company records and other information, the Company believes that
all Commission filing requirements applicable to its Directors and officers with
respect to the Company's fiscal year ended March 31, 1999 were complied with.
Proposals of Shareholders
Proposals of shareholders intended to be considered at the 2000 Meeting of
Shareholders must be received by the Secretary of the Company not less than
sixty days nor more than ninety days prior to August 4, 2000.
15
<PAGE>
Form 10-K
The Company will furnish without charge to each person whose Proxy is being
solicited, upon request of any such person, a copy of the Annual Report to
Shareholders of the Company on Form 10-K for the fiscal year ended March 31,
1999 as filed with the Securities and Exchange Commission, including the
financial statements. Such report was filed with the Securities and Exchange
Commission on or about June 29, 1999. Requests for copies of such reports
should be directed to Sport Chalet, Inc., Attention: Howard K. Kaminsky,
Secretary, 920 Foothill Boulevard, La Canada, California 91011.
Please date, sign and return the enclosed Proxy at your earliest
convenience in the enclosed envelope. No postage is required for mailing in the
United States. A prompt return of your Proxy is appreciated.
By Order of the Board of Directors,
/s/ Howard K. Kaminsky
Howard K. Kaminsky
Secretary
16
<PAGE>
- --------------------------------------------------------------------------------
Please mark [X]
your votes as
indicated in
this example
The Board of Directors Recommends a vote FOR:
ELECTION OF DIRECTORS FOR WITHHELD
Nominee: [_] [_]
Eric S. Olberz
WITHHELD FOR: (Write that nominee's name in the
space provided below).
_________________________________________________
----
|
|
Signature _______________________ Signature _____________________ Date ________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE>
- --------------------------------------------------------------------------------
PROXY
SPORT CHALET, INC.
920 Foothill Boulevard
La Canada, California 91011
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 5, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY'S BOARD OF DIRECTORS
The undersigned shareholder(s) hereby appoints Norbert J. Olberz and John
R. Attwood, and each of them, with power of substitution, as attorneys and
proxies for and in the name and place of the undersigned, and hereby
authorizes them to represent and to vote all of the shares of Common Stock
of SPORT CHALET, INC. to be held of record as of June 11, 1999, which the
undersigned is entitled to vote at the Annual Meeting of Shareholders of
SPORT CHALET, INC. to be held on August 5, 1999 at the Pasadena Hilton
Hotel, 150 S. Los Robles Avenue, Pasadena, California 91101, at 9:00 a.m.
PDST, and at any adjournment thereof.
(Continued and to be signed on other side)
-------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
