<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 the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
CHICO'S FAS, 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
(CHICO'S LOGO)
CHICO'S FAS, INC.
11215 METRO PARKWAY
FT. MYERS, FLORIDA 33912
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 9, 1998
To the Stockholders of
Chico's FAS, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Chico's
FAS, Inc., will be held on Tuesday, the ninth day of June, 1998, at 2:00 P.M.,
Local Time, at the Company's World Headquarters, 11215 Metro Parkway, Ft. Myers,
Florida for the following purposes:
1. To elect two Class II directors to each serve for a three-year
term;
2. To ratify the appointment of Arthur Andersen LLP as the Company's
independent certified public accountants for fiscal year 1999; and
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The close of business on April 20, 1998 has been fixed by the Board of
Directors as the record date for the determination of the stockholders entitled
to notice of and to vote at the meeting or any adjournments thereof.
Stockholders are requested to date, sign and mail the enclosed proxy promptly in
the enclosed addressed envelope. If you should be present at the meeting and
desire to vote in person, you may withdraw your proxy.
By Order of the Board of Directors,
CHARLES J. KLEMAN, Secretary
April 21, 1998
<PAGE> 3
(CHICO'S LOGO)
CHICO'S FAS, INC.
11215 METRO PARKWAY
FT. MYERS, FLORIDA 33912
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 9, 1998
To the Stockholders of April 21, 1998
Chico's FAS, Inc.:
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Chico's FAS, Inc. ("Chico's" or the
"Company"), from the holders of the Company's common stock for use at the Annual
Meeting of Stockholders and at any adjournments thereof. This meeting will be
held at 2:00 P.M., Local Time, on Tuesday, June 9, 1998 at the Company's World
Headquarters, 11215 Metro Parkway, Ft. Myers, Florida.
Any proxy given pursuant to this solicitation may be revoked by notice in
writing to the Secretary prior to the voting, by delivering a proxy bearing a
later date or by attending the Annual Meeting and voting the shares in person.
No such notice of revocation or later-dated proxy, however, will be effective
until received by the Company at or prior to the Annual Meeting. Unless the
proxy is revoked, the shares represented thereby will be voted at the Annual
Meeting or any adjournment thereof. The giving of the proxy does not affect the
right to vote in person should the stockholder attend the meeting.
The entire cost of preparing and mailing the proxy material will be borne
by the Company. Solicitation of proxies will be made by mail, personally, or by
telephone or telegraph, by officers, directors and regular employees of the
Company. The Company will request brokerage houses and other custodians,
nominees and fiduciaries to forward soliciting material to the stockholders and
the Company will reimburse such institutions for their out-of-pocket expenses
incurred thereby.
It is important that proxies be returned promptly to avoid unnecessary
expense. Therefore, whether you plan to attend or not, you are urged, regardless
of the number of shares of stock owned, to date, sign and return the enclosed
proxy promptly.
The approximate date on which this proxy is to be mailed to stockholders is
April 27, 1998.
Shares of common stock, par value $.01 per share (the "Common Stock") are
the only outstanding voting securities of the Company.
The Board of Directors in accordance with the By-Laws has fixed the close
of business on April 20, 1998, as the record date for determining the
stockholders entitled to notice of and to vote at the Annual Meeting of
Stockholders and adjournments thereof. At the close of business on such date,
the outstanding number of voting securities of the Company was 8,012,584 shares
of Common Stock, each of which is entitled to one vote. All votes will be
tabulated by employees of the Registrar and Transfer Company, the Company's
transfer agent for the Common Stock, whose representatives will serve as one or
more of the inspectors of election. Abstentions and broker non-votes are each
included in the determination of the number of shares present but are not
counted on any matters brought before the meeting.
<PAGE> 4
1. ELECTION OF DIRECTORS -- ITEM ONE ON YOUR PROXY CARD
The current terms of the three classes of directors expire in 1998 (Class
II directors), 1999 (Class III directors) and 2000 (Class I directors).
Directors are generally elected for three-year terms.
Two Class II directors are to be elected at the 1998 Annual Meeting. The
Board of Directors has nominated the following persons to stand for election at
the 1998 Annual Meeting for the two director seats (terms expiring in 2001):
Helene B. Gralnick
Verna K. Gibson
It is the intention of the persons named in the enclosed form of proxy,
unless otherwise directed, to vote such proxy "FOR" the election of Helene B.
Gralnick and Verna K. Gibson as Class II directors of the Company, each to serve
for the term described above. The nominees that receive a plurality of the votes
cast by the shares entitled to vote at the Annual Meeting shall be elected as
the directors.
The proposed nominees for election as directors are willing to be elected
as such. If, as a result of circumstances not now known or foreseen, the
nominees shall be unavailable or unwilling to serve as a director, proxies may
be voted for the election of such other persons as the Board of Directors may
select. The Board of Directors has no reason to believe that the nominees will
be unable or unwilling to serve.
NOMINEES FOR ELECTION AT THIS MEETING TO TERMS EXPIRING IN 2001
HELENE B. GRALNICK, 50, is Senior Vice President -- Design and Concept for
the Company. Helene B. Gralnick was a co-founder of Chico's, together with her
husband, Marvin J. Gralnick, and has served the Company in various senior
executive capacities throughout its history. She was first elected Vice
President/Secretary in 1983. Ms. Gralnick was elected as Senior Vice
President -- Merchandise Concept in 1992. In September 1993, Ms. Gralnick
stepped down from all officer positions with the Company. In connection with the
resignation of Jeffrey J. Zwick as Chief Executive Officer, President and a
director of the Company in November 1994, Ms. Gralnick returned to the Company
on a full time basis to head up merchandise design, marketing and image for the
Company. In February 1995, Ms. Gralnick was elected as Senior Vice
President -- Design and Concept.
Director since 1983.
VERNA K. GIBSON, 53, presently is, a partner of Retail Operations, Inc., a
business advisory firm founded in June 1993. From January 1991 through 1995, she
was President of Outlook Consulting, International, Inc. and from December 1994
to July 1996, Ms. Gibson was the Chairman of the Board of Petrie Retail, Inc. On
October 12, 1995, Petrie Retail, Inc. filed a voluntary petition for bankruptcy
protection under Chapter 11 of the Federal Bankruptcy Code. Ms. Gibson has over
30 years of experience in women's apparel retailing including having served from
1985 to 1991 as President of Limited Stores, Inc., Cacique, Inc. and Limited
Too, Inc., all of which were subsidiaries of The Limited, Inc., a retail apparel
specialty chain. Ms. Gibson also serves as a director of The Caldor Corporation,
Today's Man, Inc., Mothers Work, Inc. and the National Retail Federation.
Director since 1993.
2
<PAGE> 5
DIRECTORS WHOSE PRESENT TERMS CONTINUE UNTIL 1999
MARVIN J. GRALNICK, 63 is Chief Executive Officer, President and Chairman
of the Board of the Company. Marvin J. Gralnick, together with his wife, Helene
B. Gralnick, founded Chico's in December 1983. He served the Company as its
Chief Executive Officer until September 1993, at which time Jeffrey J. Zwick
succeeded Mr. Gralnick in this position. In connection with the resignation of
Jeffrey J. Zwick as Chief Executive Officer, President and a director of the
Company in November 1994, Mr. Gralnick returned to the Company on a full time
basis to head up merchandise design, marketing and image for the Company. In
February 1995, Mr. Gralnick reassumed the role of Chief Executive Officer and in
March 1997 reassumed the position of President following the departure of
Melissa Payner. Mr. Gralnick served as President from the Company's founding
until 1990 when he became Chairman of the Board and was given the official title
of Chief Executive Officer. Mr. and Ms. Gralnick's vision and creative talents
led the development and evolution of the Company's philosophy and the design and
feel of Chico's merchandise and Chico's stores through September 1, 1993 and
since November 1994 again are leading the Company in this regard.
Director since 1983.
JOHN W. BURDEN, 61, has been a consultant and partner in Retail Operations,
Inc. since November 1993. From December, 1990 to March 1993, Mr. Burden's
principal occupation was as an officer in Pelican Palms Realty Company, a real
estate sales company he owned. In 1990, he retired as the Chairman of both
Federated Department Stores, Inc., and Allied Department Stores, Inc., following
a 19 year career in various merchandising positions in the Federated
organization, including as President of Burdines and Chairman of the Abraham and
Strauss Division. Prior to that time, he spent 12 years with Macy's. Mr. Burden
is also director of Danskin, Inc., Hills Stores Co. and Carson Pirie Scott, Inc.
Director since 1997.
DIRECTORS WHOSE PRESENT TERMS CONTINUE UNTIL 2000
CHARLES J. KLEMAN, 47, is Executive Vice President -- Finance, Chief
Financial Officer and Secretary/Treasurer of the Company. Charles J. Kleman has
been employed by Chico's since January 1989, when he was hired as the Company's
Controller. In 1991, he was elected as Vice President/Assistant Secretary. In
1992, Mr. Kleman was designated as the Company's Chief Financial Officer. In
September 1993, he was elected to the additional position of
Secretary/Treasurer, served as Senior Vice President -- Finance from January
1996 through November 1996 and effective December 1996, was promoted to the
position of Executive Vice President -- Finance. Prior to joining Chico's, Mr.
Kleman was an independent accounting consultant in 1988, and from 1986 to 1988
Mr. Kleman was employed by Electronic Monitoring & Controls, Inc., a
manufacturer and distributor of energy management systems, as its Vice
President/Controller. Prior to 1986, Mr. Kleman was employed by various
independent certified public accounting firms, spending over four years of that
time with Arthur Andersen & Co. Mr. Kleman is responsible for accounting,
financial reporting, management information systems, investor relations and
overall management of the distribution center.
Director since 1993.
ROSS E. ROEDER, 60, is Chairman of the Board and Chief Executive Officer of
MDR, Inc., International Consulting Group. He is also currently Chairman of the
Board of Morgan-Kaufman Publishers, Inc., where he has been a director since
1986. He has also been Chairman of HTI Technologies, Inc. a manufacturer of
medical and remote sensing equipment since 1987. Mr. Roeder also serves as a
director of Smart and Final, Inc. From 1986 until February 1993, Mr. Roeder was
President and Chief Executive Officer of Federal Construction Company. Prior to
1986, he was President, Chief Executive Officer and Chief Operating Officer of
Fotomat Corp.
Director since 1997.
3
<PAGE> 6
MEETINGS OF THE BOARD OF DIRECTORS AND STANDING COMMITTEES
The Board of Directors held eight meetings during fiscal 1998. In fiscal
1998, each incumbent Director attended at least 75% of the total number of Board
and Committee meetings.
The Board of Directors has a standing Audit Committee and Compensation and
Benefits Committee but does not have a Nominating Committee. The Board of
Directors functions as a Nominating Committee, and the Board will consider
written recommendations from stockholders for positions on the Board of
Directors in accordance with the procedures set forth in the Amended and
Restated Articles of Incorporation of the Company. See -- "Stockholder Proposals
for Presentation at the 1999 Annual Meeting" for further information.
The current members of the Audit Committee are Mr. Burden, Ms. Gibson and
Mr. Roeder. The Audit Committee held one meeting during fiscal 1998. The Audit
Committee's principal responsibilities are to recommend annually a firm of
independent certified public accountants to the Board of Directors, to review
the annual audit of the Company's financial statements and to meet with the
independent certified public accountants of the Company from time to time in
order to review the Company's internal controls and financial management
practices.
The current members of the Compensation and Benefits Committee are Mr.
Burden, Ms. Gibson and Mr. Roeder. The Compensation and Benefits Committee held
two meetings during fiscal 1998. The principal responsibilities of the
Compensation and Benefits Committee are to review and make recommendations to
the Board of Directors concerning the compensation of all officers of the
Company; to review and make recommendations with respect to the Company's
existing and proposed compensation plans, to serve as the committee responsible
for administering the Company's 1992 Stock Option Plan, the Company's 1993 Stock
Option Plan and the Company's 1993 Employee Stock Purchase Plan.
COMPENSATION OF DIRECTORS
Nonemployee directors receive $3,000 per quarter plus $500 for each Board
meeting and $500 for each committee meeting physically attended or held by
telephone and whether or not coinciding with a Board meeting. All directors
receive reimbursement of reasonable out-of-pocket expenses incurred in
connection with meetings of the Board of Directors or committees thereof.
In May and June, 1997, Ms. Gibson was granted options to acquire 20,000 and
5,000 shares of Common Stock, respectively, at $3.25 and $5.0625 per share,
respectively, which options became fully exercisable on November 13, 1997, and
December 17, 1997, respectively, and expire on May 13, 2007, and June 17, 2007,
respectively. Mr. Burden and Mr. Roeder were each granted options to acquire
10,000 shares of Common Stock at $5.0625 price per share, which options became
fully exercisable on December 17, 1997, and expire on June 17, 2007.
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS -- ITEM TWO ON YOUR PROXY CARD
The firm of Arthur Andersen LLP has been the Company's independent
certified public accountants since September 1991. Arthur Andersen LLP has been
recommended by the Audit Committee and approved by the Board of Directors as the
Company's independent certified public accountants for the year ending January
30, 1999, subject to ratification of such appointment by the stockholders.
Representatives of Arthur Andersen LLP are expected to be present at the Annual
Meeting of Stockholders with the opportunity to make a statement if they desire
to do so and such representatives are expected to be available to respond to
appropriate questions by stockholders. Ratification of the Company's independent
certified public accountants is not required by the Company's By-Laws or
otherwise, but the Board of Directors has decided to seek such ratification as a
matter of good corporate practice.
The Board recommends that you vote "FOR" ratification of the appointment of
Arthur Andersen LLP as independent certified public accountants for the period
specified. If the stockholders do not ratify this
4
<PAGE> 7
appointment, other certified public accountants will be considered by the
directors upon recommendations of the Audit Committee.
OTHER BUSINESS
It is not expected that any other matters are likely to be brought before
the meeting. However, if any other matters are presented, it is the intention of
the persons named in the proxy to vote the proxy in accordance with their best
judgment.
5
<PAGE> 8
COMPENSATION COMMITTEE REPORT
To: The Board of Directors
OVERVIEW AND PHILOSOPHY
The Compensation Committee of the Board of Directors (the "Compensation
Committee") is composed of three members, each of whom is an outside director of
the Company. The Compensation Committee provides overall guidance on the
Company's compensation and benefits philosophy. In addition, the Committee
approves and monitors the Company's
- executive compensation and benefits programs
- executive employment agreements
- stock option plan
- profit sharing plan
- stock purchase plan
The primary objectives of the Compensation Committee are to assure that the
Company's executive compensation and benefits program
- reflects the Company's unique, entrepreneurial, customer-focused,
orientation
- is competitive with other profitable, growing specialty retail companies
- safeguards the interests of the company and its stockholders
- is effective in driving performance to achieve financial goals and create
stockholder value
- fosters teamwork on the part of management
- is cost-effective and fair to employees, management, and stockholders
- is well communicated and understood by program participants
The Company's executive compensation policies are designated to attract,
motivate, and retain highly qualified executive officers who can enhance
stockholder value, and to support a performance-oriented environment that
rewards achievement of the Company's planned financial goals. The Compensation
Committee meets periodically during each fiscal year to review the Company's
existing compensation and benefits programs and to consider modifications that
seek to provide a direct relationship between executive compensation and
sustained corporate performance.
The Company compensates its executive officers through three principal
types of compensation: annual base salary, annual incentive bonuses and
long-term incentive award through stock options. The Company, as a matter of
policy, places substantial emphasis on incentive bonuses and long-term stock
options since these two forms of compensation are viewed as very effective at
correlating executive officer compensation with corporate performance and
increases in stockholder value.
In addition to the three types of compensation just mentioned, certain
executive officers are eligible to participate in the Company's Employee Stock
Purchase Plan.
BASE SALARY
The annual base salary of each executive officer is based on the scope of
his or her responsibility and accountability within the Company, as well as on
performance and experience criteria. In addition, the Compensation Committee
considers salary and other compensation arrangements of other speciality
retailers of similar size and similar growth to determine appropriate levels
required to attract, motivate, and retain the most qualified management
personnel.
The Compensation Committee believes that the Company's most direct
competitors for executive talent are not necessarily all of the companies that
would be included in a peer group established to compare stockholder returns.
Thus, the compensation peer group is not the same as the peer group index in the
"Comparison of Cumulative Total Return" graph included in this proxy statement.
6
<PAGE> 9
The Compensation Committee, upon the recommendation by the Chief Executive
Officer, determines and makes final decisions regarding base salary of
executives on an annual basis. The Compensation Committee recognizes that, to
some degree, the determination of an executive officer's base salary involves
subjective considerations.
INCENTIVE BONUSES
A significant component of an executive officer's total cash compensation
consists of an incentive bonus, which is intended to make the executive
compensation dependent on the Company's performance and to provide executive
officers with incentives to achieve Company goals, increase stockholder value,
and work as a team. The bonuses are based on the Company's achievement of its
targeted pre-tax income goal, which is part of the Company's overall plan. The
pre-tax income goal, as well as the overall plan, is reviewed and approved by
the Compensation Committee prior to the start of each bi-annual period. To
encourage high levels of performance, the targeted pre-tax income goal is
established at a level which builds in, among other things, a conservatively
aggressive growth in sales and comparable store sales.
Bonuses are awarded to the executive team based on the Company's attainment
of specific pre-determined pre-tax income levels relative to the targeted
pre-tax income goal established in the Company's overall plan. If the Company
does not match its minimum pre-tax income goal level, then no bonuses are
awarded. Through the end of 1995, bonuses were awarded on a quarterly basis.
Beginning in 1996, bonuses have been awarded on a bi-annual basis. The executive
team was awarded a total of approximately $315,000 in fiscal 1998 ended January
31, 1998.
LONG TERM STOCK OPTION COMPENSATION
The Compensation Committee believes that providing key employees, including
executive officers, with the opportunity to acquire stock ownership over time is
the most desirable way to align their interests with those of the Company's
stockholders. Stock options, awarded under the Company's 1992 and 1993 Stock
Option Plans and in some limited cases outside of the plans pursuant to separate
individual stock option agreements, provide an incentive that focuses the
attention of executive officers on managing the Company from the perspective of
an owner with an equity interest in the business. In addition, stock options are
a key part of the Company's program for motivating and rewarding managers over
the long term. Stock options granted to key employees are tied to future
performance of the Company's stock and will provide value only when the price of
the Company's stock exceeds the option grant price.
The Compensation Committee, upon the recommendation by the Chief Executive
Officer, determines and makes final decisions regarding stock option awards made
under the Company's plan. Such factors as performance and responsibilities of
individual managers and the management team as a whole as well as general
industry practices play an integral role in the determination of the number of
options awarded to a particular senior executive. In determining the size of the
individual award of options, the Compensation Committee also considers the
amounts of options outstanding and previously granted, the amount of options
remaining available for grant under the stock option plans, the aggregate amount
of current awards, and the amount necessary to retain qualified management.
In accordance with its business strategy and compensation philosophy, the
Company has granted stock options to a significant number of employees in
managerial positions to afford them an opportunity to participate in the
Company's future growth and to focus them on the contributions which are
necessary for the financial success and business growth of the Company and,
thereby, the creation of value for its stockholders. In fiscal 1998 ended
January 31, 1998, a total of 354,700 options were granted, including 200,000
options which were awarded to senior executives.
Stock options are typically awarded each year based on an assessment of
each recipient's ongoing contribution to overall corporate performance. As a
means to encourage a stock option recipient to remain in service with the
Company, stock option awards vest over time, in equal amounts over a period of
three years from the date of grant. All stock options have exercise prices at
least equal to the market value of the Company's stock on the date of grant.
7
<PAGE> 10
PROFIT SHARING PLAN AND STOCK PURCHASE PLAN FOR EMPLOYEES
In 1992, the Company adopted a profit sharing plan to provide a means for
all eligible employees at all levels of the Company to share in the Company's
profits and accumulate retirement savings. The Company's contribution to the
profit sharing plan for each year is determined by the discretion of the
Company's Board of Directors. Contributions to the profit sharing plan are made
out of the Company's profits to reward employees for their collective efforts in
producing profits, based on the amount it deemed appropriate in light of the
results of the Company's operations for the year. In fiscal 1998, the Company
accrued a contribution of approximately $296,000 to its profit sharing plan,
which amounted to approximately 6.5% of its pre-tax profits for fiscal 1998.
In 1993, the Company adopted a stock purchase plan to provide all eligible
employees at all levels an opportunity to become stockholders of the Company.
This plan is viewed as an effective way to help align the interest of all
employees with those of the Company's stockholders. As an inducement, eligible
employees may purchase shares of stock in the Company at a 15% discount to the
value of the stock established during the exercise period.
FISCAL 1998 COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER
The general policies described above for the compensation of the executive
officers also apply to the compensation approved by the Compensation Committee
with respect to the fiscal 1998 compensation for Mr. Gralnick, the Company's
Chairman of the Board and Chief Executive Officer.
Mr. Gralnick's base salary was increased to $300,000 in fiscal 1998, which
reflected a $100,000 increase from his base salary in fiscal 1997. In fiscal
1998, Mr. Gralnick also was awarded an aggregate bonus of $132,000, as a result
of the Company having reached certain targeted performance incentive goals.
Notwithstanding Mr. Gralnick's substantial ownership position in the Company,
the Compensation Committee awarded him 100,000 stock options in fiscal 1998 in
order to recognize his efforts in leading the Company through the initial stages
of what has thus far proved to be a successful turnaround for the Company.
Mr. Gralnick's compensation was based on industry comparisons as well as on
the Company's performance over the most recent years, as reflected in the
Company's Annual Report to Stockholders which accompanies this proxy statement.
In addition, in fiscal 1997, the Company had engaged the services of an
independent executive compensation firm to assess the compensation package of
Mr. Gralnick and of the other members of the senior management team. The
compensation firm considered the nature and scope of each manager's
responsibilities relative to comparable companies in analyzing management
compensation. Mr. Gralnick's compensation was designed to take into account the
report of the independent executive compensation firm.
Under the leadership of Mr. Gralnick and the rest of the management team,
total revenues for Chico's increased from approximately $16 million in 1990 to
approximately $75 million in fiscal 1998. Between 1990 and fiscal 1998, pre-tax
income grew from a loss of approximately $289,000 to a profit of $4.4 million,
and net income grew from a loss of $186,000 to a profit of $2.8 million, or $.34
diluted earnings per share.
This report has been provided by the Compensation Committee.
COMPENSATION AND BENEFITS COMMITTEE:
JOHN BURDEN
VERNA K. GIBSON
ROSS E. ROEDER
8
<PAGE> 11
PERFORMANCE GRAPH
The following graph compares the cumulative total return on the Company's
Common Stock with the cumulative total return of the companies in the Standard &
Poor's 500 Index and the S&P 500 Retail Stores - Specialty - Apparel Industry
Index. Cumulative total return for each of the periods shown in the Performance
Graph is measured assuming an initial investment of $100 on March 24, 1993, the
date of the Company's initial public offering, and the reinvestment of
dividends. The performance graph reflects the change in the Company's year end
from the Sunday closest to December 31 to the Saturday closest to January 31.
COMPARISON OF CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
RETAIL
MEASUREMENT PERIOD CHICO'S FAS, (SPECIALTY-
(FISCAL YEAR COVERED) INC. S&P 500 INDEX APPAREL)
<S> <C> <C> <C>
3/24/93 100.00 100.00 100.00
1/29/94 226.79 109.35 97.70
1/28/95 100.00 110.45 80.25
2/3/96 58.93 152.54 95.36
2/1/97 57.14 192.33 119.01
1/31/98 100.86 253.54 203.13
</TABLE>
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<PAGE> 12
EXECUTIVE OFFICERS AND KEY EMPLOYERS
The following table sets forth certain information regarding the Company's
continuing executive officers, continuing directors, nominees for director and
certain other key employees.
<TABLE>
<CAPTION>
YEARS WITH
THE
AGE POSITION COMPANY
--- -------- ----------
<S> <C> <C> <C>
EXECUTIVE OFFICERS
Marvin J. Gralnick.................... 63 Chief Executive Officer, President,
Chairman of the Board and Director 14
Helene B. Gralnick.................... 50 Senior Vice President -- Design and
Concept and Director 14
Charles J. Kleman..................... 47 Executive Vice President -- Finance,
Chief Financial Officer,
Secretary/Treasurer and Director 9
Scott A. Edmonds...................... 40 Senior Vice President -- Operations
and Assistant Secretary 4
CERTAIN KEY EMPLOYEES
Mori C. MacKenzie..................... 48 Director of Stores 2
Patricia A. Murphy.................... 54 Senior Merchant --
Richard Ransom........................ 53 Controller 3
</TABLE>
NON-DIRECTOR EXECUTIVE OFFICER AND CERTAIN KEY EMPLOYEES
Scott A. Edmonds has been employed by Chico's since September 1993, when he
was hired as Operations Manager. In February 1994, he was elected to the
position of Vice President -- Operations and effective January 1, 1996 he was
promoted to the position of Senior Vice President -- Operations. Mr. Edmonds is
responsible for human resources, store development and operations, leasing and
maintenance, franchise operations, and management of the headquarters and
woodshop. From March 1985 until September 1993, he was President/General Manager
of the Ft. Myers branch of Ferguson Enterprises, Inc. an electric and plumbing
wholesaler.
Mori C. MacKenzie has been with the Company since October 1995, when she
was hired as the Director of Stores. Ms. MacKenzie is responsible for store and
field operations management, hiring and training. From January 1995 until
October 1995, Ms. MacKenzie was the Vice President of Store Operations for
Canadians Corporation. From August 1994 until December 1994, she was the Vice
President of Store Development for Goody's Family Clothing. From April 1992
until August 1994, Ms. MacKenzie was the Vice President of Stores for United
Retail Group ("URG") and from August 1991 until April 1992 she was employed by
Conston Corp., a predecessor of URG. In addition, Ms. MacKenzie was Vice
President -- Stores for Park Lane from November 1987 until July 1991, and was
Regional Director of Stores for the Limited, Inc. from June 1976 until October
1987.
Patricia A. Murphy has been with the Company since September 1997, when she
was hired as the Senior Merchant. Ms. Murphy is principally responsible for the
buying, planning and distribution activities associated with procurement of
merchandise. Ms. Murphy has recently also been given primary responsibility for
production and quality control. From February 1987 until September 1997, Ms.
Murphy was Vice President of Merchandising for Doncaster and from October 1985
until February 1987 was Merchandiser and National Sales Manager for Caribou
Sportswear. From 1981 until 1985, she was Director of Fashion Coordination for
Lane Bryant.
Richard Ransom has been with the Company since March 1995, when he was
hired as the Controller. Mr. Ransom is responsible for accounting and payroll
administration. From July 1994 until November 1994, Mr. Ransom was Controller
for Lurias and from March 1992 until July 1994 was Assistant Controller for
Office Depot. From 1988 until 1992, he was Assistant Vice President, Store and
General Accounting for T.J.
10
<PAGE> 13
Maxx and from 1973 until 1988 he was Assistant Vice President, Assistant
Controller and in charge of Merchandise Accounting for Zaire Corporation.
Marvin J. Gralnick and Helene B. Gralnick are husband and wife. None of the
other executive officers or directors are related to one another. Executive
officers are elected by and serve at the discretion of the Board of Directors.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table provides information concerning the annual compensation
of each of the named executive officers of the Company, as defined under
applicable Securities and Exchange Commission Rules, for services rendered to
the Company in each of the Company's last three fiscal years.
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION
COMPENSATION(1) AWARDS
-------------------- ------------ ALL
SECURITIES OTHER
UNDERLYING COMPEN-
NAME AND FISCAL YEAR SALARY BONUS(3) OPTIONS SATION
PRINCIPAL POSITION ENDED(2) ($) ($) (#) ($)(4)
------------------ ----------------- --------- -------- ------------ -------
<S> <C> <C> <C> <C> <C>
Marvin J. Gralnick,........................ January 31, 1998 267,307 132,000 100,000 4,821
Chairman of the Board, February 1, 1997 203,846 56,000 (5) 2,794
Chief Executive Officer and President December 31, 1995 200,000 -0- 15,000 1,306
Helene B. Gralnick,........................ January 31, 1998 126,923 45,900 25,000 4,382
Senior Vice President -- February 1, 1997 44,231 13,020 (5) 602
Design and Concept December 31, 1995 100,000 -0- 15,000 653
Charles J. Kleman,......................... January 31, 1998 209,375 76,275 40,000 4,821
Executive Vice President -- February 1, 1997 191,106 39,375 30,000 3,396
Finance and Chief Financial Officer December 31, 1995 150,000 -0- 15,000 1,958
Scott A. Edmonds,.......................... January 31, 1998 166,828 60,750 35,000 4,821
Senior Vice President -- February 1, 1997 152,885 31,500 24,000 3,396
Operations December 31, 1995 114,904 -0- 15,000 1,500
</TABLE>
- ---------------
(1) All Other Compensation, other than salary and bonuses, does not exceed the
minimum amounts required to be reported pursuant to Securities and Exchange
Commission Rules.
(2) For the year ended February 1, 1997, reflects the change in the Company's
fiscal year from the Sunday closest to December 31 to the Saturday closest
to January 31. Compensation for the interim period January 1, 1996 to
January 28, 1996, which was created as a result of the change in fiscal
year, is not shown in the table. Such compensation was primarily salary and
was paid on a basis consistent with compensation paid for prior fiscal
years.
(3) Amounts in this column consist of certain bonuses including bonuses earned
under the semi-annual management incentive plan which is keyed to the
Company's performance. Amounts earned with respect to a particular fiscal
year are accrued as expenses in such fiscal year.
(4) This category includes the Company's contributions to the Profit Sharing
Plan.
(5) Not applicable. No compensation of this type received.
11
<PAGE> 14
OPTION/SAR GRANTS TABLE
The following table shows information concerning stock options granted
during fiscal 1998 for the individuals shown in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
----------------------------- ---------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS EXERCISE
UNDERLYING GRANTED TO OR BASE
OPTIONS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED (#)(1) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
---- -------------- ------------ -------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Marvin J. Gralnick.............. 100,000 32.3% 3.25 5/13/2007 204,359 517,966
Helene B. Gralnick.............. 25,000 8.1% 3.25 5/13/2007 51,098 129,492
Charles J. Kleman............... 40,000 12.9% 3.25 5/13/2007 81,756 207,187
Scott A. Edmonds................ 35,000 11.3% 3.25 5/13/2007 71,536 181,288
</TABLE>
- ---------------
(1) The grants of options above were made in May 1997. All of the options vest
annually at a rate of 33 1/3% on each anniversary date of the grant
beginning on the first anniversary.
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
The following table shows information concerning stock option values as of
the end of fiscal 1998.
AGGREGATED FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE OPTIONS AT FISCAL YEAR-END (#) AT FISCAL YEAR-END ($)
NAME EXERCISE (#) REALIZED($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(2)
---- ------------ -------------- ------------------------------ ----------------------------
<S> <C> <C> <C> <C>
Marvin J. Gralnick.... -- -- 10,000/105,000 15,600/388,800
Helene B. Gralnick.... -- -- 10,000/30,000 15,600/103,050
Charles J. Kleman..... 100,000 397,413 241,160/65,000 570,956/161,400
Scott A. Edmonds...... -- -- 24,000/56,000 16,080/142,110
</TABLE>
- ---------------
(1) This represents the excess of the fair market value of the Company's Common
Stock as of the date of exercise above the exercise price of the options.
(2) This represents the excess of the fair market value of the Company's Common
Stock of $7.06 per share as of January 31, 1998, above the exercise price of
the options.
EMPLOYMENT AGREEMENTS
Effective February 15, 1995, the Company entered into new employment
agreements with Mr. Gralnick and Ms. Gralnick which each provide for an annual
base salary and certain other benefits. Pursuant to the employment agreements,
the 1995 annualized base salaries of Mr. Gralnick and Ms. Gralnick were $200,000
and $100,000, respectively, subject in each case to annual increases as agreed
upon between the executive and the Board of Directors (currently $300,000 and
$140,000, respectively). Under the terms of the employment agreements, the
Company contracted to employ Mr. Gralnick and Ms. Gralnick for a period which
currently extends through December 31, 1998, and which period, by the terms of
the agreement is automatically extended for additional one year periods until
the respective employment agreement is terminated by the Company or the
executive.
12
<PAGE> 15
Effective April 1, 1993, the Company entered into an employment agreement
with Mr. Kleman which provides for an annual base salary and certain other
benefits. Pursuant to the employment agreement and certain further actions of
the Board of Directors, the 1996 base salary of Mr. Kleman was $150,000 subject
to annual increases thereafter as agreed upon between Mr. Kleman and the Board
of Directors (currently $220,000). Under the terms of the employment agreement,
the Company contracted to employ Mr. Kleman for a period which currently extends
through December 31, 1998, and which period, by the terms of the agreement is
automatically extended for additional one year periods until the employment
agreement is terminated by the Company or Mr. Kleman.
Effective, June 28, 1995, the Company entered into an employment agreement
with Mr. Edmonds which provides for an annual base salary and certain other
benefits. Pursuant to the employment agreement, the initial base salary of Mr.
Edmonds was $125,000 subject to annual increases thereafter as agreed upon
between Mr. Edmonds and the Board of Directors (currently $175,000). Under the
terms of Mr. Edmonds employment agreement, the Company contracted to employ Mr.
Edmonds for a period which currently extends through December 31, 1998, and
which period, by the terms of the agreement, is automatically extended for
additional one year periods until the employment agreement is terminated by the
Company or Mr. Edmonds.
The employment agreements provide that Messrs. Gralnick, Kleman and Edmonds
and Ms. Gralnick are entitled to certain severance benefits in the event that
their employment is terminated by the Company "without cause" or by such
executive following a "change of control" (both as defined in the employment
agreements). In such cases, the executive would receive his or her salary for
the remainder of the then effective employment term (or, if longer, for 6
months, if the termination is without cause, and for 12 months, if the
termination follows a change in control). Each employment agreement is also
subject to termination in the event of disability, death or voluntary retirement
by the individual or his or her termination for cause. Each employment agreement
provides for a covenant not to compete which is to continue for two years
following any termination.
The Company has entered into substantially identical indemnification
agreements with each of the Company's executive officers and directors in which
the Company has agreed to indemnify each executive officer and director (the
"Indemnified Party") against all losses, costs and expenses that an Indemnified
Party may incur as a result of or arising out of service as an officer or
director of the Company. Among its provisions, each indemnity agreement affords
the Indemnified Party the right to counsel of his or her choosing and obligates
the Company to advance the reasonable fees and expenses of such counsel on
behalf of the Indemnified Party. The indemnification agreements provide there is
to be no indemnification and require the repayment to the Company of any
advanced funds in situations where indemnification is not permitted by
applicable law.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Company's Compensation and Benefits Committee
which was created in June 1993, are John W. Burden, Verna K. Gibson and Ross E.
Roeder. Neither Mr. Burden, Ms. Gibson nor Mr. Roeder has at any time been an
officer or employee of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
S CORPORATION MATTERS
On February 10, 1993, the Company and Marvin J. Gralnick, Barry E.
Szumlanski, Lynn D. Mann, Jeffrey J. Zwick and Helene B. Gralnick (the "S
Corporation Stockholders") entered into an S Corporation Tax Allocation and
Indemnification Agreement (the "Tax Agreement") relating to their respective
income tax liabilities. Because the Company became fully subject to corporate
income taxation after the consummation of the Company's initial public offering,
any reallocation of income and deductions between the period during which the
Company was treated as an S Corporation and the period during which the Company
is
13
<PAGE> 16
subject to corporate income taxation may increase the taxable income of one
party while decreasing that of another party. Accordingly, the Tax Agreement is
intended to assure that taxes are borne by the Company and the S Corporation
Stockholders to the extent that such parties were required to report the related
income for tax purposes. Subject to certain limitations, the Tax Agreement
generally provides that the S Corporation Stockholders will be indemnified by
the Company with respect to federal and state income taxes (plus interest and
penalties) shifted from a Company taxable year subsequent to the consummation of
the Company's initial public offering to a taxable year in which the Company was
an S Corporation, and the Company will be indemnified by the S Corporation
Stockholders with respect to federal and state income taxes shifted from an S
Corporation taxable year to a Company taxable year subsequent to the
consummation of the Company's initial public offering. Any payment made by the
Company to the S Corporation Stockholders pursuant to the Tax Agreement may be
considered by the Internal Revenue Service or the state taxing authorities to be
nondeductible by the Company for income tax purposes. No payments were made
under the Tax Agreement during fiscal 1998.
LEASES OF DISTRIBUTION CENTER AND STORAGE FACILITIES
Prior to the completion and opening of the Company's World Headquarters in
September 1994, the Company utilized certain leased property and facilities as
its distribution center and for storage purposes. The property and facilities
that the Company utilized as its prior distribution center (the "Distribution
Facilities") were leased until August, 1996, from a Florida general partnership
(GS&M #1) in which Marvin J. Gralnick and Barry E. Szumlanski are each equal
partners with Lynn D. Mann. An existing facility that the Company used for
storage is currently leased from a separate Florida general partnership (GS&M
#2) in which Marvin J. Gralnick, Helene B. Gralnick and Barry E. Szumlanski are
equal partners with Lynn D. Mann.
In June 1996, GS&M#1 entered into a separate lease agreement with an
unrelated third party (the "New Lease") to lease the Distribution Facilities and
as a result released the Company from its existing lease with GS&M#1 pursuant to
the terms of a Lease Termination and Settlement Agreement. The terms of the
Lease Termination and Settlement Agreement provide that the Company was to pay
to GS&M#1, (a) until the date January 31, 1998, (the date on which the lease
with the Company was scheduled to expire) the difference between the lease
payments due under the GS&M#1 lease and the New Lease, (b) the real estate
broker commissions payable by GS&M#1 as a result of entering into the New Lease,
(c) all real estate taxes imposed against the Distribution Facilities until
January 31, 1998 and (d) the cost of certain inspections and repairs required
under the New Lease. In addition, under the Lease and Termination Agreement, the
Company has agreed until January 31, 1998 to unconditionally guarantee the
payments due by the unrelated third party tenant under the New Lease. Because of
expense accruals previously reflected, no additional expense is anticipated to
be recognized by the Company. GS&M#1 received $90,646 in 1997.
Under the GS&M#2 lease the Company continues to be obligated to pay all of
the rent and costs associated with owning and operating the facility, including
utilities, taxes and insurance. The Company continues to pay these same costs
with respect to GS&M#2 even though the facility is no longer being actively
utilized by the Company. The Company is currently utilizing the facility for
storage space. Although believed to be at fair market rental at the time the
lease was entered into, the rent currently being paid under the GS&M#2 lease is
at a rate which is significantly above market rates for similar property. In
fiscal 1997, the Company paid as rent to GS&M #2 (exclusive of the
passed-through costs) approximately $57,971. The GS&M #2 lease has a ten year
term which commenced December 1, 1988. As a result of the completion and
operation of its new World Headquarters (which provides combined corporate
headquarters, distribution center and woodshop facilities), the Company no
longer has a need for the facility leased under GS&M#2. The Company is no longer
exploring alternative courses of action with respect to the GS&M#2 lease because
the lease expires in 1998.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
To the Company's knowledge, based solely on a review of the forms, reports
and certificates filed with the Company by the Company's directors and officers
and the holders of more than 10% of the Company's Common Stock, all Section
16(a) filing requirements were complied with by such persons in fiscal 1998.
14
<PAGE> 17
SECURITY OWNERSHIP
The following table sets forth, as of April 20, 1998, the number of shares
of the Company's Common Stock beneficially owned by 1) each person known to the
Company as having beneficial ownership of more than 5% of the Company's Common
Stock together with such person's address, 2) each of its directors and nominees
to become a director, 3) each named executive officer as defined under
applicable Securities and Exchange Commission rules and 4) all directors and
executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME OF BENEFICIAL OWNER OF BENEFICIAL PERCENT
OR NUMBER IN GROUP OWNERSHIP(1) OF CLASS
- ------------------------------------------------------------ ----------------- --------
<S> <C> <C>
Marvin J. Gralnick.......................................... 1,776,794(2) 22.2%
c/o Chico's FAS, Inc.
11215 Metro Parkway
Ft. Myers, Florida 33912
Helene B. Gralnick.......................................... 1,776,794(2) 22.2%
c/o Chico's FAS, Inc.
11215 Metro Parkway
Ft. Myers, Florida 33912
Rodin, Ltd.................................................. 1,705,128(2) 21.3%
301 Congress, Suite 1900
Austin, Texas 78701
FMR Corp.................................................... 801,100(3) 10.0%
82 Devonshire Street
Boston, MA 02109
Heartland Advisors, Inc..................................... 460,000(4) 5.7%
790 North Milwaukee Street
Milwaukee, Wisconsin 53202
Brinson Partners, Inc....................................... 590,600(5) 7.4%
209 South LaSalle
Chicago, Illinois 60604-1295
Charles J. Kleman........................................... 276,136(6) 3.5%
Scott A. Edmonds............................................ 50,466(7) *
Verna K. Gibson............................................. 138,000(8) *
Ross E. Roeder.............................................. 14,000(9) *
John W. Burden.............................................. 35,000(10) *
All Directors and Executive Officers as a Group (7
persons).................................................. 2,290,396(11) 28.6%
</TABLE>
- ---------------
* Less than one percent
(1) Beneficial ownership of shares, as determined in accordance with applicable
Securities and Exchange Commission rules, includes shares as to which a
person has or shares voting power and/or investment power. Except as
otherwise indicated, all shares are held of record with sole voting and
investment power.
(2) Marvin J. Gralnick and Helene B. Gralnick are husband and wife. The number
of shares shown for Marvin J. Gralnick and the number of shares shown for
Helene B. Gralnick each represent the aggregate of all shares held by
Rodin, Ltd., a Texas Limited Partnership. A limited liability company
established by Mr. Gralnick and Ms. Gralnick and of which Mr. Gralnick and
Ms. Gralnick are the sole members and managing members, is the sole general
partner of Rodin, Ltd., owning an aggregate of 1% of the partnership
interests. An irrevocable intervivos trust established by Mr. Gralnick is
one of two limited partners and owns 49.5% of the partnership interests and
a separate irrevocable intervivos trust established by Ms. Gralnick is the
other limited partner and owns the remaining 49.5% of the
15
<PAGE> 18
partnership interests. Also includes a total of 71,666 shares for Mr.
Gralnick and Ms. Gralnick which are deemed to be beneficially owned by them
by virtue of certain stock options that are currently exercisable or become
exercisable within 60 days.
(3) This information is derived from a Schedule 13G dated February 9, 1998
filed by FMR Corporation ("FMR"). FMR has sole dispositive power with
respect to all of the shares shown and may be deemed the deemed to be the
beneficial owner with respect to all of the shares shown. The address for
FMR. is 82 Devonshire Street, Boston, Massachusetts 02109.
(4) This information is derived from a Schedule 13G dated January 23, 1998.
(5) This information is derived from a Schedule 13G dated February 10, 1998
filed jointly by Brinson Partners, Inc. ("BPI"), Brinson Holdings, Inc.
("BHI"), SBC Holding (USA), Inc. ("SBCUSA") and Swiss Bank Corporation
("SBC"). BPI, BHI , SBCUSA and SBC may be deemed the beneficial owners with
respect to all of the shares shown. BPI, BHI, SBCUSA and SBC have shared
voting and dispositive power with respect to the shares beneficially owned
by each of them. The address of BTC and BHI is 209 South LaSalle, Chicago,
Illinois 60604-1295. The address of SBC and SBCUSA is Aeschenplatz 6
CH-4002, Basel, Switzerland.
(6) Includes 2,190 shares owned by Mr. Kleman's son, 2,125 shares owned by his
daughter and 643 shares owned by Mr. Kleman's spouse. In addition, includes
269,493 shares deemed to be beneficially owned by Mr. Kleman by virtue of
stock options that are currently exercisable or become exercisable within
60 days and 1,600 shares deemed to be beneficially owned by virtue of stock
options that are currently exercisable or become exercisable within 60 days
by Mr. Kleman's spouse.
(7) Includes 48,666 shares deemed to be beneficially owned by Mr. Edmonds by
virtue of certain stock options that are currently exercisable or become
exercisable within 60 days.
(8) Includes 56,000 shares deemed to be beneficially owned by Ms. Gibson by
virtue of certain stock options that are currently exercisable.
(9) Includes 10,000 shares deemed to be beneficially owned by Mr. Roeder by
virtue of stock options that are currently exercisable.
(10) Includes 10,000 shares deemed to be beneficially owned by Mr. Burden by
virtue of stock options that are currently exercisable.
(11) Pursuant to applicable Securities and Exchange Commission rules, the
1,705,128 shares of Common Stock deemed to be beneficially owned by each of
Marvin J. Gralnick and Helene B. Gralnick, are counted only once for
purposes of this calculation.
STOCKHOLDER PROPOSALS FOR PRESENTATIONS AT THE 1999 ANNUAL MEETING
Pursuant to the General Rules under the Securities Exchange Act of 1934,
proposals of stockholders intended to be presented at the 1999 Annual Meeting of
Stockholders must be received by management of the Company at its executive
offices on or before December 22, 1998.
The Company's Amended and Restated Articles of Incorporation also require
certain advance notice to the Company of any stockholder proposal and of any
nominations by stockholders of persons to stand for election as directors at a
stockholders' meeting. Notice of stockholder proposals and of director
nominations must be timely given in writing to the Secretary of the Company
prior to the meeting at which the directors are to be elected. To be timely,
notice must be received at the principal executive offices of the Company not
less than 60 days prior to the meeting of stockholders; provided, however, that
in the event that less than 70 days' notice prior to public disclosure of the
date of the meeting is given or made to the stockholders, notice by the
stockholder, in order to be timely, must be so delivered or received not later
than the close of business on the tenth day following the day on which such
notice of the date of the annual meeting was mailed or public disclosure of the
date of the annual meeting was made, whichever first occurs.
A stockholder's notice with respect to a proposal to be brought before the
annual meeting must set forth in addition to the matters required to be set
forth by the General Rules under the Securities Exchange Act of
16
<PAGE> 19
1934; (a) a brief description of the proposal and the reasons for conducting
such business at the annual meeting, (b) the name and address, as they appear on
the Company's books, of the stockholder proposing such business and any other
stockholders known by such stockholder to be supporting such proposal, (c) the
class and number of shares of the Company which are beneficially owned by such
stockholder on the date of such stockholder notice and by any other stockholders
known by such stockholder to be supporting such proposal on the date of such
stockholder notice, and (d) any financial interest of the stockholder in such
proposal.
A stockholder's notice with respect to a director nomination must set forth
(1) the name, age, business address and residence address of the person, (2) the
principal occupation or employment of the person, (3) the class and number of
shares of the Company which are beneficially owned by such person, (4) all
information that would be required to be included in a proxy statement
soliciting proxies for the election of the nominee director (including such
person's written consent to serve as a director if so elected). As to the
stockholder providing such notice, such stockholder must set forth (1) the name
and address, as they appear on the Company's books, of the stockholder and (2)
the class and number of shares of the Company which are beneficially owned by
such stockholder on the date of such stockholder notice.
The complete Amended and Restated Articles of Incorporation provisions
governing these requirements are available to any stockholder without charge
upon request from the Secretary of the Company.
By Order of the Board of Directors,
CHARLES J. KLEMAN, Secretary
Dated: April 21, 1998
17
<PAGE> 20
APPENDIX
/X/ PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE CHICO'S FAS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 9, 1998
The undersigned, a stockholder of CHICO'S FAS, INC. the ("Company"), does
hereby appoint Marvin J. Gralnick, Charles J. Kleman and Verna K. Gibson and
each of them acting individually, as the attorneys and proxies of the
undersigned, with power of substitution, for and on behalf of the undersigned,
to attend the Annual Meeting of Stockholders of the Company to be held at the
Company's World Headquarters, 11215 Metro Parkway, Ft. Myers, Florida at 2:00
P.M., local time, on June 9, 1998 and any adjournment or adjournments thereof
(the "Annual Meeting"), to represent the undersigned at the Annual Meeting, and
there to vote all the shares of Common Stock of the Company which the
undersigned is entitled to vote at the Annual Meeting, in any manner and with
the same effect as if the undersigned were personally present at the Annual
Meeting, all as described in the Company's Proxy Statement dated April 21, 1998
relating to the Annual Meeting, and the undersigned hereby authorizes and
instructs the above named proxies to vote as specified to the right.
Please be sure to sign and date Date
this Proxy in the box below. _____________________________
___________________________________________________________________________
Stockholder sign above Co-holder (if any) sign above
WITH- FOR ALL
1. ELECTION OF DIRECTORS of all FOR HOLD EXCEPT
nominees listed (except as marked to
the contrary below): / / / / / /
Nominee for Class II Directors:
HELENE B. GRALNICK AND VERNA K. GIBSON
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE
FOR ANY INDIVIDUAL NOMINEE, MARK "FOR ALL
EXCEPT" AND WRITE THAT NOMINEE'S NAME IN
THE SPACE PROVIDED BELOW.
_____________________________________________________________________________
2. PROPOSAL TO RATIFY THE FOR AGAINST ABSTAIN
APPOINTMENT OF ARTHUR / / / / / /
ANDERSEN LLP AS THE COMPANY'S
INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS FOR FISCAL YEAR 1999.
3. OTHER MATTERS. Unless a line is stricken through this sentence, the proxies
herein may in their discretion vote the shares represented by this proxy
upon such other matters as may properly come before the Annual Meeting.
The shares represented by this Proxy will be voted only if this Proxy is
properly executed and timely returned. In that event, such shares will be voted
in the manner directed herein. IF NO DIRECTION IS MADE, THE SHARES WILL BE
VOTED FOR THE NOMINEES FOR DIRECTORS, FOR THE PROPOSAL TO RATIFY THE
APPOINTMENT OF THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS AND IN THE
DISCRETION OF THE PROXIES FOR OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE
ANNUAL MEETING.
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THE ABOVE PROPOSALS.
- ------------------------------------------------------------------------------
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
CHICO'S FAS, INC.
The undersigned acknowledges receipt of (1) the Company's 1998 Annual
Report to Stockholders and (2) the Company's Notice of Annual Meeting and
Proxy Statement dated April 21, 1998 relating to the Annual Meeting. The
undersigned does hereby revoke any proxy previously given with respect to the
shares represented by this Proxy.
NOTE: Your signature should appear as your name appears hereon. As to
shares held in joint names, each joint owner should sign. If the signer is a
corporation, please sign full corporate name by a duly authorized officer. If
a partnership, please sign in partnership name by authorized person. If signing
as attorney, executor, administrator, trustee, guardian, or in other
representative capacity, please give full title as such.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
