<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT OF SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by the Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material pursuant to 240.14a-11(c) or 240.14a-12
/ / Confidential, for use of the Commission Only (as permitted by Rule
14a-6(e)(2)
AMERICAN EAGLE OUTFITTERS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Statement)
- --------------------------------------------------------------------------------
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rulers 0-11(c)(1)(ii), 14a-6(I)(1), or
14a-6(j)(2)
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(I)(3).
/ / 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:
_______________________________________________________________
(2) Aggregate number of securities to which transaction applies:
_______________________________________________________________
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange 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:
_______________________________________________________________
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify 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
AMERICAN EAGLE OUTFITTERS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD
JUNE 3, 1996
AND
PROXY STATEMENT
IMPORTANT
Please mark, sign and date your proxy and promptly return it in the
enclosed envelope. No postage is necessary if mailed in the United States.
<PAGE> 3
AMERICAN EAGLE OUTFITTERS, INC.
150 Thorn Hill Drive
Warrendale, Pennsylvania 15086
412-776-4857
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 3, 1996
---------------------
May 6, 1996
To the Stockholders of
American Eagle Outfitters, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
American Eagle Outfitters, Inc., an Ohio corporation (the "Company"), will be
held at the Company's Design Center at 8 West 40th Street, Suite 1400, New York,
New York, on Monday the 3rd day of June, 1996, at 10:00 a.m., local time, for
the following purposes:
1. To elect eight directors, each for a term of one year and
until their successors are duly elected and qualified.
2. To transact such other business as may properly come before
the meeting or any adjournment thereof.
On January 3, 1996, the Company elected to change its fiscal year end
from the Saturday closest to July 31 to the Saturday closest to January 31.
Annual meetings going forward will be on a January year end basis.
Whether or not you plan to attend the meeting, please date, sign and
mail the enclosed proxy in the envelope provided. If you attend the meeting, you
may vote in person, and your proxy will not be used.
By Order of the Board of Directors
Dale E. Clifton
Secretary
<PAGE> 4
AMERICAN EAGLE OUTFITTERS, INC.
May 6, 1996
---------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JUNE 3, 1996
---------------------
INTRODUCTION
This Proxy Statement is furnished to the stockholders of American Eagle
Outfitters, Inc., an Ohio corporation (the "Company"), in connection with the
solicitation by the Board of Directors of the Company of proxies to be used at
the Annual Meeting of Stockholders to be held on Monday, June 3, 1996, at 10:00
a.m., local time, at the Company's Design Center at 8 West 40th Street, Suite
1400, New York, New York, and at any adjournment thereof. It is being mailed to
the stockholders on or about May 6, 1996.
All shares represented by properly executed proxies received by the
Company prior to the meeting will be voted in accordance with the stockholder's
directions for the election of directors. A proxy may be revoked, without
affecting any vote previously taken, by written notice mailed to the Company
(Attention: Dale E. Clifton, Secretary) or delivered in person at the meeting,
by filing a duly executed, later dated proxy, or by attending the meeting and
voting in person.
Stockholders of record at the close of business on April 2, 1996, are
entitled to notice of and to vote at the Annual Meeting and any adjournment or
adjournments thereof. At April 2, 1996, the Company had outstanding 9,875,000
shares of Common Stock, without par value, entitled to vote at the Annual
Meeting. Each Common Share entitles the holder thereof to one vote upon each
matter to be voted upon by stockholders at the Annual Meeting.
The presence, in person or by proxy, of a majority of the outstanding
shares of Common Stock of the Company is necessary to constitute a quorum for
the transaction of business at the Annual Meeting. Abstentions and broker
non-votes are counted for purposes of determining the presence or absence of a
quorum. Broker non-votes occur when brokers, who hold their customers' shares in
street name, sign and submit proxies for such shares and vote such shares on
some matters, but not others. This would occur when brokers have not received
any instructions from their customers, in which case the brokers, as the holders
of record, are permitted to vote on "routine" matters, which include the
election of directors, but not on non-routine matters.
3
<PAGE> 5
The election of each director nominee requires the favorable vote of a
plurality of all votes cast by the holders of Common Stock at a meeting at which
a quorum is present. Proxies that are marked "Withhold Authority" and broker
non-votes will not be counted toward such nominee's achievement of a plurality
and thus will have no effect. Each other matter to be submitted to the
stockholders for approval, if any, at the Annual Meeting requires the
affirmative vote of the holders of a majority of the Common Stock voting on the
matter. For purposes of determining the number of shares of Common Stock voting
on the matter, abstentions will be counted and will have the effect of a
negative vote; broker non-votes will not be counted and thus will have no
effect.
SECURITY OWNERSHIP OF PRINCIPAL
STOCKHOLDERS AND MANAGEMENT
OWNERSHIP OF COMMON STOCK
The following table sets forth, as of April 2, 1996, certain
information with regard to the beneficial ownership of the Company's Common
Stock by: (i) each person known by the Company to own beneficially more than 5%
of the outstanding shares of Common Stock; (ii) each of the Company's directors;
(iii) each executive officer named in the summary compensation table below; and
(iv) all directors and executive officers as a group.
<TABLE>
<CAPTION>
Shares Beneficially Owned(1)
----------------------------
Stockholder Number Percent
----------- ------ -------
<S> <C> <C>
Retail Ventures, Inc. (2) 2,844,611 28.8%
Natco Industries, Inc. (2) 3,107,189 31.5%
S.H.D. Investments LLC (3) 1,000,000 10.1%
Jay L. Schottenstein (4)(5) 2,863,626 29.0%
Geraldine Schottenstein (5) 3,107,189 31.5%
Saul Schottenstein (6) 7,500 *
George Kolber (7) 20,500 *
Edward S. Finkelstein 1,000 *
Martin P. Doolan 0 *
John L. Marakas (8) 6,500 *
Thomas R. Ketteler 12,500 *
David W. Thompson 22,500 *
Roger S. Markfield 158,318 1.6%
Sam Forman 2,950 *
Robert G. Lynn 0 *
All directors and executive officers as a group 3,080,814 31.2%
</TABLE>
* Represents less than 1% of the Company's shares of Common Stock.
(footnotes on next page)
4
<PAGE> 6
(1) Unless otherwise indicated, each of the stockholders has sole voting
and investment power with respect to the shares of Common Stock
beneficially owned. The percent is based upon the 9,875,000 shares
outstanding at April 2, 1996 and the number of shares, if any, as to
which the named person has the right to acquire beneficial ownership
upon the exercise of stock options exercisable within 60 days of April
19, 1996.
(2) The address for Retail Ventures, Inc. ("RVI") and Natco Industries,
Inc. ("Natco") is 1800 Moler Road, Columbus, Ohio 43207.
(3) The address for S.H.D. Investments LLC is 5804 E. Slauson, City of
Commerce, CA 90040.
(4) Includes 2,844,611 shares of Common Stock owned by RVI and 15 shares of
Common Stock held as custodian for a family member. Jay L.
Schottenstein serves as Chairman and Chief Executive Officer of RVI and
Natco. Jay L. Schottenstein is the beneficial owner of 69.9% of the
outstanding voting securities of RVI. Accordingly, he may be deemed to
be the beneficial owner of the shares of Common Stock of the Company
held by RVI.
(5) Geraldine Schottenstein is the mother of Jay L. Schottenstein.
Geraldine Schottenstein is the beneficial owner of 78.8% of the
outstanding voting securities of Natco. Accordingly, she may be deemed
to be the beneficial owner of the shares of Common Stock of the Company
held by Natco.
(6) Includes 2,500 shares subject to exercisable options held by Saul
Schottenstein. Saul Schottenstein is the uncle of Jay L. Schottenstein
and is a director of RVI and Natco. For a description of Saul
Schottenstein's beneficial ownership of the outstanding voting
securities of RVI and Natco, see "--Ownership of RVI and Natco."
(7) Includes 10,000 shares subject to exercisable options held by Mr.
Kolber.
(8) Includes 3,500 shares subject to exercisable options held by Mr.
Marakas.
OWNERSHIP OF RVI AND NATCO
The following table shows the shares of RVI and Natco common stock
owned beneficially by each person owning more than 5% of the shares, each
director or executive officer owning any shares, and by all directors and
executive officers of the Company as a group, as of April 2, 1996.
<TABLE>
<CAPTION>
Shares Shares
of RVI of Natco
Common Percent Common Percent
Stockholder Stock of Class Stock of Class
----------- ----- -------- ----- --------
<S> <C> <C> <C> <C>
Jay L. Schottenstein(1) 349.5 69.9% 7,372.3 40.4%
Saul Schottenstein(2) 51.0 10.2% 361.4 2.0%
Geraldine Schottenstein(3) 153.0 30.6% 14,383.2 78.8%
Ann Schottenstein Deshe(4) 97.0 19.4% 7,010.9 38.4%
Susan Schottenstein Diamond(5) 48.5 9.7% 3,505.5 19.2%
All directors and executive
officers as a group 354.5 70.9% 7,733.7 42.4%
</TABLE>
(footnotes on next page)
5
<PAGE> 7
(1) Represents sole and/or shared voting and investment power over shares
held in trust for family members as to which Jay L. Schottenstein is
either Trustee or a Trust Advisor.
(2) Represents sole and/or shared voting and investment power over 46 RVI
shares held in trust for family members as to which Saul Schottenstein
is Trustee and 5 RVI shares owned directly.
(3) Represents sole and/or shared voting and investment power over shares
held in trust for family members as to which Geraldine Schottenstein is
Trustee.
(4) Ann Schottenstein Deshe is the sister of Jay L. Schottenstein.
Represents sole and/or shared voting and investment power over shares
held in trust for family members as to which Ann Schottenstein Deshe is
either Trustee or a Trust Advisor.
(5) Susan Schottenstein Diamond is the sister of Jay L. Schottenstein.
Represents sole and/or shared voting and investment power over shares
held in trust for family members as to which Susan Schottenstein
Diamond is either Trustee or a Trust Advisor.
ELECTION OF DIRECTORS
The members of the Board of Directors of the Company are elected at the
Annual Meeting. The number of members of the Board has been fixed at eight by
action of the Board pursuant to the Code of Regulations (By-laws) of the
Company. Board members serve until the annual meeting following their election
or until their successors are duly elected and qualified.
NOMINEES FOR ELECTION AS DIRECTORS
The enclosed proxy, if returned duly executed and not revoked, will be
voted as specified thereon, or if no instructions are given, will be voted FOR
the nominees listed below. In the event that any nominee should become
unavailable, the Board of Directors may decrease the number of directors,
pursuant to the Code of Regulations, or may designate a substitute nominee, in
which event the proxy will be voted for such substitute nominee. The Board has
no reason to believe that any nominee will be unavailable or, if re-elected,
unable to serve. Each of the nominees became a director of the Company at the
time it was organized in January 1994, except for John L. Marakas, who was
elected in April 1994, Edward S. Finkelstein, who was elected in July 1995,
Martin P. Doolan, who was elected in August 1995, and George Kolber, who was
elected in December 1995. The following table sets forth certain information
with respect to each nominee. A description of each nominee's principal
occupation for the past five years follows the table.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
<S> <C> <C>
Jay L. Schottenstein 41 Chairman and Chief Executive Officer
Saul Schottenstein 74 Vice Chairman and Director
George Kolber 45 Vice Chairman, Chief Operating Officer and Director
Martin P. Doolan 56 Director
Edward S. Finkelstein 71 Director
Thomas R. Ketteler 53 Director
John L. Marakas 69 Director
David W. Thompson 43 Director
</TABLE>
6
<PAGE> 8
Jay L. Schottenstein has served as Chairman and Chief Executive Officer
of the Company and its predecessors since March 1992 and prior to that time he
served as a Vice President and Director of the Company's predecessors since
1980. He has also served since March 1992 as Chairman and Chief Executive
Officer of Schottenstein Stores Corporation ("SSC"), a privately-held company
with interests in retailing, real estate and manufacturing which had
consolidated sales in its 1995 fiscal year of $1.3 billion. He has also served
as Chairman since March 1992 and as Chief Executive Officer since April 1991 of
Value City Department Stores, Inc., a publicly-held company which is subject to
the reporting requirements of Section 13 of the Securities Exchange Act of 1934,
as amended, which operates a chain of 79 off-price department stores and is 68%
owned by SSC, with the remaining shares publicly-held and traded on the New York
Stock Exchange. Mr. Schottenstein served as Vice Chairman of SSC since 1986 and
as a director of SSC since 1982. He has also served as an officer and director
of various other corporations owned or controlled by members of his family (the
"Schottenstein Family") since 1976, including the Valley Fair Corporation, a
publicly-held company which is subject to the reporting requirements of Section
13 of the Securities Exchange Act of 1934, as amended. Jay L. Schottenstein is
the nephew of Saul Schottenstein.
Saul Schottenstein has been a director of the Company and its
predecessors since 1980. He has served as President of SSC since 1984, and a
director of SSC since 1982. He served as Executive Vice President of SSC from
1982 to 1984. Prior to that time he served in various executive capacities with
SSC since 1946. He is also an officer and director of various other corporations
owned or controlled by the Schottenstein Family, including Value City Department
Stores, Inc. and the Valley Fair Corporation, each a publicly-held company which
is subject to the reporting requirements of Section 13 of the Securities
Exchange Act of 1934, as amended.
George Kolber has served as Vice Chairman of the Company's Board of
Directors and Chief Operating Officer since December 1995. Prior to joining the
Company, he served as Vice President of Schottenstein Stores Corporation since
1979 and as Vice President, Administration of Value City Department Stores, Inc.
from 1990 until 1993. Prior to that time, Mr. Kolber served as Vice President
and Chief Financial Officer of Strauss Stores and R&S Strauss, Associates. He
has also served as Chairman of the Board of Directors of Penn Jersey Auto Stores
and on the Board of Directors of Wieboldts Department Stores.
Martin P. Doolan serves as Chairman, President and Chief Executive
Officer of U.S. Netting, Inc., a manufacturer of plastic extruded filtration
netting headquartered in Austin, Texas. He served as Chairman of Bestop, Inc.,
an automotive convertible top manufacturer from 1988 to June 1995. He has also
served as Chief Executive Officer of a number of other companies including
Walt's Radiator and Muffler, Inc., an automotive retail service and distribution
chain where he continues to serve as a director; Sun Engine, a remanufacturer of
domestic automobile engines; Pilliod Cabinet Corp., a furniture manufacturer;
and Sunwest International, Inc. a brass door and hardware manufacturer.
7
<PAGE> 9
Edward S. Finkelstein served as Chairman of R.H. Macy & Co. from 1980
to 1992 and is currently Chairman of Finkelstein Associates, Inc., a retail
consulting firm. Mr. Finkelstein is also a director of Time Warner, Inc.
Thomas R. Ketteler has served SSC as Chief Operating Officer since
April 1995, as a director since 1985 and Vice President of Finance since 1981.
Prior to that time, he was a partner in the firm of Alexander Grant and Company,
Certified Public Accountants. Mr. Ketteler is an officer and director of various
other corporations owned or controlled by the Schottenstein Family. Since 1991,
Mr. Ketteler has also served as Secretary and a director of the Valley Fair
Corporation, a publicly-held company which is subject to the reporting
requirements of Section 13 of the Securities Exchange Act of 1934, as amended.
John L. Marakas has been retired since April 1991. Prior to his
retirement, Mr. Marakas served as President and a director of Nationwide
Corporation, an insurance and financial services holding company with assets of
approximately $25 billion, from March 1972 to April 1990 and as President and a
director of Nationwide Life Insurance Company from September 1981 to April 1991.
David W. Thompson has served as President since June 1993 of Value City
Furniture, a division of SSC. From June 1981 to June 1993, Mr. Thompson served
as Vice President of Value City Furniture.
INFORMATION CONCERNING BOARD OF DIRECTORS
During the 27 week period ended February 3, 1996 ("Transition 1996"),
the Board of Directors met five times and acted by unanimous written consent
twice. Saul Schottenstein did not attend three of the five meetings. The Board
has standing Audit and Stock Option Committees.
The members of the Audit Committee are John L. Marakas, Edward S.
Finkelstein and Martin P. Doolan. The function of the Audit Committee is to
recommend to the Board a firm of accountants to serve as the Company's auditors
and to review with the independent auditors and the appropriate corporate
officers matters relating to corporate financial reporting and accounting
procedures and policies, adequacy of financial, accounting and operating
controls, and the scope of the audit. The Audit Committee met once in Transition
1996.
The members of the Stock Option Committe are John L. Marakas, Edward S.
Finkelstein and Martin P. Doolan. The function of the Stock Option Committee is
to recommend to the Board the number and terms of any stock options to be
granted under the Company's stock option plan. The committee acted by unanimous
written consent twice in Transition 1996.
Directors who are not employees are paid $2,000 for each Board and
Committee meeting attended, with a minimum annual compensation of $8,000.
Directors who are also employees of the Company do not receive additional
compensation for serving as directors.
8
<PAGE> 10
The Company's 1994 Stock Option Plan provides for the issuance of
options to purchase 2,500 shares of Common Stock to each non-employee director
serving on the Stock Option Committee on the first trading day in each fiscal
year. The exercise price for each option is the fair market value of the Common
Stock on the date of grant. The exercise price must be paid either in cash, with
previously acquired Common Stock of the Company, the option holder's promissory
note or any combination of the foregoing, provided, however, use of
consideration other than cash requires the consent of the Board. All of the
options become exercisable one year after the date of grant and remain
exercisable for a period of ten years from the date of grant, subject to earlier
termination after termination of the option holder's service as a director of
the Company. None of the options are transferable by the holder except by will
or the laws of descent and distribution.
EXECUTIVE OFFICERS
The following persons are executive officers of the Company. Except as
otherwise indicated, each was elected to the position indicated with the Company
upon its organization in January, 1994. For information regarding officers who
are also directors, see "Election of Directors." The officers of the Company are
elected annually by the Board and serve at the pleasure of the Board.
Roger S. Markfield, age 54, has served as President and Chief
Merchandising Officer of the Company since February 1995 and prior thereto as
Executive Vice President Merchandising for the Company and its predecessors
since May 1993. Prior to joining the Company, he served as Executive Vice
President--General Merchandising Manager for the Limited Division of The
Limited, Incorporated, a large national specialty retailer from May 1992 to
April 1993. From 1969 to 1976 and from 1979 to 1992, he was employed by R.H.
Macy & Co. ("Macy's"), a national retailer operating department and specialty
stores, as a Buyer in Boys' Wear rising to the office of President of Corporate
Buying--Mens. From 1976 to 1979, Mr. Markfield left Macy's to serve as Senior
Vice President of Merchandising and Marketing for the Gap Stores, Inc.
Laura A. Weil, age 39, has served as Chief Financial Officer of the
Company since December 1995. Prior to joining the Company, she was a consultant
to companies including Schottenstein Stores Corporation, from March 1995 to
December 1995. From 1992 to 1995, she was Senior Vice President and head of the
retailing investment banking practice at Oppenheimer & Co., Inc. Prior to
joining Oppenheimer, Ms. Weil held various executive positions at R.H. Macy &
Co., Inc. from 1989 to 1992, including Vice President-Finance and Chief
Financial Officer-Credit Operations. From 1988-1989 she was an executive with
L'Herbier de Provence, a Paris-based cosmetics and toiletries retailer. From
1979-1981 and 1983-1988, Ms. Weil held various investment banking positions with
Lehman Brothers and its predecessor Lehman Brothers Kuhn Loeb Inc., including
Vice President of the firm's Merchandising Group.
9
<PAGE> 11
Joseph E. Kerin, age 50, has served as Executive Vice President Stores
and Operations of the Company and its predecessors since January 1991. From May
1989 to November 1989, he served as a Regional Store Manager for Value City
Department Stores, Inc. Prior to that time, he held various positions with the
Company's predecessors, including Senior Vice President--Store Operations from
October 1987 to October 1988, Vice President--General Manager Store Operations
from February 1979 to October 1987, General Manager Store Operations from
November 1975 to February 1979 and Regional/District Manager of the Silverman's
Division from October 1972 to November 1975.
Dale E. Clifton, age 42, has served the Company and its predecessors as
Controller since June 1986, as Secretary and Chief Accounting Officer since
October 1988, as Vice President since October 1994 and as, Treasurer since July
1995. He served the Company and its predecessors as Assistant Controller from
1984 to June 1986. Prior to joining the Company, he worked as a certified public
accountant from 1975 to 1984 at Alpern, Rosenthal & Company.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers, directors and persons who are beneficial owners of more than
ten percent of the Company's Common Stock ("reporting persons") to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission. Reporting persons are required by Securities and Exchange Commission
regulations to furnish the Company with copies of all Section 16(a) forms filed
by them. Based on its review of the copies of Section 16(a) forms received by
it, the Company believes that, during Transition 1996, all filing requirements
applicable to reporting persons were complied with, except one late filing for
George Kolber.
EXECUTIVE OFFICER COMPENSATION
The following table sets forth certain information regarding
compensation paid during the Company's Transition 1996 and each of the last
three fiscal years to the Company's Chief Executive Officer and to each of the
Company's most highly compensated executive officers or former executive
officers whose compensation exceeded $100,000 during Transition 1996.
10
<PAGE> 12
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation (1) Long Term Compensation
----------------------- ----------------------
Name and Fiscal Other Annual Restricted Options/
Principal Position Year Salary Bonus Compensation Stock Awards SARs(#)
- ------------------ ---- ------ ----- ------------ ------------ -------
(1) (2)
<S> <C> <C> <C> <C> <C> <C>
Jay L. Schottenstein (4) 1996 $125,025 None None None None
Chairman and Chief 1995 $250,050 None None None None
Executive Officer 1994 $149,068 None None None 75,000
1993 None None None None None
Roger S. Markfield (5) 1996 $206,232 None $43,865 None None
President and Chief 1995 $413,587 $100,000 $899 None None
Merchandising Officer 1994 $282,464 42,000 $150,154 $2,464,000(3) 15,000
1993 $62,316 None None None None
Sam Forman (6) 1996 $153,872 None $8,302 None None
Former Vice Chairman 1995 $506,448 None $2,832 None None
1994 $411,432 None $7,812 None None
1993 $394,357 None None None None
Robert G. Lynn (7) 1996 $133,648 None $59,930 None None
Former Vice Chairman 1995 $183,546 None None None None
and Chief Operating
Officer
</TABLE>
(1) 1996 refers to the 27 week Transition Period from July 30, 1995 to
February 3, 1996
(2) Includes amounts allocated for the reimbursement of moving expenses to
Mr. Markfield of $41,984 for Transition 1996 and $149,979 for fiscal
1994, as well as commuting expense reimbursements to Mr. Lynn of
$59,930 for Transition 1996.
(3) On April 11, 1994, the Board of Directors of the Company approved the
issuance of Common Stock to certain key employees of the Company
pursuant to a one time grant of restricted shares issued under a form
of restricted stock agreement between the Company and the employee. The
agreement conditions the vesting of the shares upon continued
employment with the Company. The restriction expires as to 20% of the
shares on April 13 of each of the five years after the grant.
(4) Jay L. Schottenstein is also Chairman of SSC and Value City Department
Stores, Inc. He does not devote his full business time to the Company.
(5) The Company has entered into an employment agreement with Roger S.
Markfield, which provides an annual base salary of $270,000 and an
annual bonus at a minimum equal to 15% of his base salary. The initial
term of the agreement expires on May 10, 1997 and automatically renews
for additional one year terms, unless terminated by either party on
sixty days notice prior to any renewal term. Mr. Markfield is entitled
to severance pay in an amount equal to one year's base salary and a
minimum bonus in the event the Company exercises its right to terminate
the agreement prior to any renewal term. The agreement also provided
for the grant of the restricted shares listed in the table. Mr.
Markfield's base salary was increased to $412,464 in fiscal 1995.
(6) Sam Forman served as Vice Chairman until October 1995.
(7) Robert G. Lynn served as Vice Chairman and Chief Operating Officer
until November 1995.
11
<PAGE> 13
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE
None of the executive officers named in the Summary Compensation Table
exercised options during Transition 1996. The following table provides certain
information on the number and value of stock options held by the executive
officers named in the Summary Compensation Table at February 3, 1996.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF IN-THE-MONEY
SHARES VALUE UNEXERCISED OPTIONS OPTIONS AT
ACQUIRED ON REALIZED AT FEBRUARY 3, 1996 (#) (1) FEBRUARY 3, 1996 ($) (2)
--------------------------- ----------------------------
NAME EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------ ------------ ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jay L. Schottenstein --- --- --- 75,000 0 0
Roger S. Markfield --- --- --- 15,000 0 0
</TABLE>
(1) Effective on February 5, 1996, the Company's Board of Directors approved
the repricing of certain outstanding stock options to the then current
market price of $6.75. Under the repricing agreement, options granted to
executive officers shall not be exercisable prior to August 6, 1996.
(2) Represents the total gain which would be realized if all in-the-money
options held at year end were exercised, determined by multiplying the
number of shares underlying the options by the difference between the per
share option exercise price and the per share fair market value at year end
of $6.75. An option is in-the-money if the fair market value of the
underlying shares exceeds the exercise price of the option.
The following Board of Directors' Compensation Report and Performance
Graph shall not be deemed incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any of the Company's
filings under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
COMPENSATION REPORT OF THE BOARD OF DIRECTORS
General. The key components of the Company's executive officer
compensation include both short term compensation consisting of annual base
salary and annual bonuses and long term, equity-based compensation consisting of
grants of restricted stock and stock option awards. The Company does not have a
Compensation Committee. The Board of Directors has delegated to the Chairman of
the Board the authority to establish the annual compensation of the officers of
the Company, other than the Chairman's compensation, as permitted under Ohio
law. The full Board of Directors has made the only grants of restricted stock by
the Company and the first grant of stock options under the Company's 1994 Stock
Option Plan, in each case prior to the Company's initial public offering. The
Stock Option Committee of the Board of Directors, which was established after
the Company's initial public offering, now grants options under the 1994 Stock
Option Plan.
12
<PAGE> 14
Chief Executive Officer's Compensation. Beginning effective January 1,
1994, Jay L. Schottenstein, the Company's Chairman and Chief Executive Officer,
began receiving a salary in the amount of $250,000 per year. That is the only
compensation he received from the Company during Transition 1996 and the Board
of Directors did not take any action to change his annual salary.
Executive Officer's Compensation. Roger S. Markfield, the President,
entered into an employment agreement with the Company in fiscal 1993 which fixed
the amount of his base salary and the amount of his restricted stock award and a
minimum bonus amount. In fiscal 1995, Mr. Markfield's base salary was increased
to $412,464 per annum, and was not changed in Transition 1996.
The remaining executive officers' base salaries for Transition 1996
were determined by the Chairman after consultation with the senior management
and discussion with each individual officer. No discretionary bonuses were paid
for Transition 1996. The determination base of salaries was based primarily on
subjective factors, such as the Chairman's perception of individual performance,
the individual's contribution to the overall performance of the Company and the
anticipated value of the individual's contribution to the Company's future
performance. The determination was not based on specific objective criteria. No
specific weight was given to any of the factors considered.
Stock Awards. The Company's 1994 Stock Option Plan was adopted at the
time the Company went public in April 1994 for the purpose of providing
long-term incentives to key employees and motivating key employees to improve
performance of the Company's stock. The Company's Stock Option Committee, which
administers the 1994 Stock Option Plan, made grants in connection with the
hiring of two executive officers in Transition 1996.
The following members of the Board of Directors respectfully submit
this report:
Jay L. Schottenstein Saul Schottenstein John L. Marakas*
Thomas R. Ketteler George Kolber Edward S. Finkelstein*
David W. Thompson Martin P. Doolan*
*Members of the Stock Option Committee.
13
<PAGE> 15
PERFORMANCE GRAPH
The following graph shows the percentage change in the cumulative total
return performance to holders of the Company's Common Stock with that of The
NASDAQ Stock Market - U.S. Index and the Standard & Poor's Specialty Apparel
Index, both of which are published indexes. This comparison includes the period
beginning April 13, 1994 (the effective date the Company's Common Stock was
registered under the Securities and Exchange Act of 1934) through January 31,
1996. The Company's shares of Common Stock are traded on The NASDAQ National
Market under the symbol "AEOS". The comparison of the cumulative total returns
for each investment assumes that $100 was invested in the Company's Common Stock
on April 14, 1994 and in the respective index on March 31, 1994.
COMPARISON OF 21 MONTH CUMULATIVE TOTAL RETURN*
AMONG AMERICAN EAGLE OUTFITTERS, INC., THE NASDAQ STOCK MARKET-US INDEX
AND THE S & P RETAIL STORES (SPECIALTY APPAREL) INDEX
[GRAPH]
<TABLE>
<CAPTION>
4/14/96 7/94 7/95 1/96
<S> <C> <C> <C> <C>
American Eagle 100 108 103 41
NASDAQ 100 97 137 145
S & P 100 89 84 88
</TABLE>
14
<PAGE> 16
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Jay L. Schottenstein and Saul Schottenstein, each of whom is an
executive officer of the Company, are also members of the Company's Board of
Directors. As stated, the Company's Chairman and Chief Executive Officer, Jay L.
Schottenstein, with the input of its senior management, determined the annual
salary and bonus compensation of the officers of the Company, other than the
Chairman's, and such determination was not formally considered and ratified by
the Board of Directors. For information regarding the relationships between the
Company and SSC, see "Certain Relationships and Related Transactions" below.
The Stock Option Committee administers and grants options under the
Company's 1994 Stock Option Plan. The Stock Option Committee consists of Edward
S. Finkelstein, John L. Marakas and Martin Doolan. Except for Mr. Finkelstein,
who is affiliated with one of the Company's suppliers, none of the other members
are present or former officers of the Company or have affiliates that are
parties to agreements with the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Schottenstein Family owns 100% of RVI and Natco. On April 2, 1996,
the Schottenstein Family, through its ownership of RVI and Natco, as well as
personal holdings, beneficially owns 60.5% of the outstanding shares of Common
Stock of the Company. The Schottenstein Family has advised the Company that it
has no present plans to reduce its interest in the Company through sales or
other dispositions. As long as the Schottenstein Family owns more than 50% of
the Company's voting shares, it will continue to have the power acting alone to
approve any action requiring a vote of the majority of the voting shares of the
Company and to elect all of the Company's directors.
The Company has certain relationships and transactions with other
entities controlled by the Schottenstein Family. The Company's Code of
Regulations provides that any such related party transaction will be subject to
approval by a majority of the disinterested directors of the Company and will be
on terms which, in the judgment of such directors, will be no less favorable to
the Company than could be obtained from unaffiliated parties.
OFFICE/DISTRIBUTION CENTER LEASE
The Company leases its distribution center and headquarters offices
from an affiliate, Linmar Realty Company, a partnership owned indirectly by the
Schottenstein Family. A new lease was entered into effective January 1, 1996, in
connection with the completion of an addition to the facility during 1995. This
lease expires on December 31, 2010. The new lease requires minimum monthly rent
payments of $4.09 per square foot for the first five years to $5.96 per square
foot for the last five years of the lease. Additionally, the company is required
to pay all real estate taxes, insurance, maintenance and certain other expenses.
For Transition 1996, the Company recorded $236,000 of rent expense under the
lease.
15
<PAGE> 17
IMPORT SERVICES AGREEMENT
Under the terms of an Import Services Agreement with the import
division of SSC ("SSC Imports"), SSC Imports processes the paperwork for the
Company's import transactions, for which it receives a fee of one percent of the
value of the imports plus reimbursement of direct expenses. For Transition 1996,
the Company paid SSC Imports for such services approximately $877,000. The
import services for merchandise processed through SSC Imports accounted for
approximately 74% of the Company's total purchases for Transition 1996.
MERCHANDISE SERVICES AGREEMENT
The Company and an affiliate of SSC, Value City Department Stores, Inc.
("VCD") have entered into an agreement that provides VCD, at the Company's
discretion, the ability to order merchandise from the same sources and using the
same designs as the Company but not using the Company's trademarks. VCD pays the
Company a royalty of seven percent of cost for such merchandise and is
restricted as to the locations and seasonal time during which the merchandise
can be sold. For Transition 1996, VCD paid the Company $208,000 under the
agreement. In addition, from time to time, the Company sells its overstock
merchandise to VCD, with limited restrictions regarding presentation of the
merchandise. For Transition 1996, VCD paid the Company $3,993,000 for such
merchandise.
OFFICER LOANS
Under the Company's restricted stock agreements, the holder of
restricted stock incurs income tax liability as the stock vests. The Company has
made loans to certain executive officers to enable them to pay their income tax
liability without selling any of the restricted stock. The loans are for one
year, bear interest at the rate of 6.8% per annum and are collateralized by the
stock. At February 3, 1996, the principal amount of the loan for Roger S.
Markfield was $210,550.
OTHER RELATIONSHIPS
The Company purchases merchandise from Azteca Production International,
a company that is owned by Paul Guez and members of his family (the "Guez
Family"). Mr. Guez has provided services to the Company and owns 12,500 shares
of the Company's stock subject to a restricted stock agreement with the Company.
On February 8, 1995, a company controlled by the Guez Family, S.H.D.
Investments, LLC, purchased 1,000,000 shares of the Company's common stock from
Sam Forman, a former officer and director of the Company. SSC guaranteed a bank
loan obtained by S.H.D. Investments, LLC in connection with the acquisition.
During Transition 1996, the Company purchased $1,882,000 of merchandise from
Azteca Productions International. In addition, the company sold some overstock
merchandise to Azteca in the amount of $767,000 during Transition 1996.
16
<PAGE> 18
The Company purchases merchandise from Wisetex Trading Limited, an
import company operated by the son of Edward S. Finkelstein, a director of the
Company, and in which Mr. Finkelstein has an ownership interest. For Transition
1996, the Company purchased merchandise from Wisetex Trading Limited in the
amount of $1,352,000.
The Company purchases merchandise from and utilizes the import services
of Prophecy Limited Partnership, an import company owned in part by members of
the Schottenstein Family. For Transition 1996, the Company purchased merchandise
and services from Prophecy Limited Partnership in the amount of $1,954,000.
REPORT TO BE PRESENTED AT THE MEETING
At the meeting, the Company's Transition 1996 Report will be presented
to Stockholders for the six months ended February 3, 1996. This report contains
financial statements and the report of Ernst & Young LLP, independent auditors,
with respect to such financial statements. It is anticipated that
representatives of Ernst & Young LLP will be present at the Annual Meeting to
respond to appropriate questions and to make a statement if such representatives
so desire. The Transition 1996 Report is not to be regarded as proxy soliciting
material and Management does not intend to ask, suggest or solicit any action
from the stockholders with respect to such report.
COST OF SOLICITATION OF PROXIES
The Company will bear the cost of the solicitation of proxies,
including the charges and expenses of brokerage firms and others for forwarding
solicitation material to beneficial owners of stock. Representatives of the
Company may solicit proxies by mail, telegram, telephone, or personal interview.
STOCKHOLDER PROPOSALS
Each year the Board of Directors submits its nominations for
election of directors at the Annual Meeting of Stockholders. Other proposals may
be submitted by the Board of Directors or the stockholders for inclusion in the
Proxy Statement for action at the Annual Meeting. Any proposal submitted by a
stockholder for inclusion in the Proxy Statement for the Annual Meeting of
Stockholders to be held in 1997 must be received by the Company (addressed to
the attention of the Secretary) on or before January 6, 1997. To be submitted at
the meeting, any such proposal must be a proper subject for stockholder action
under the laws of the State of Ohio, and must otherwise conform to applicable
requirements of the Proxy Rules of the Securities and Exchange Commission.
17
<PAGE> 19
OTHER MATTERS
The only business which the management intends to present at the
meeting consists of the matters set forth in this statement. The management
knows of no other matters to be brought before the meeting by any other person
or group. If any other matter should properly come before the meeting, the proxy
enclosed confers upon the persons designated herein authority to vote thereon in
their discretion.
THE COMPANY'S TRANSITION 1996 REPORT, INCLUDING FINANCIAL
STATEMENTS, WAS FURNISHED TO STOCKHOLDERS PRIOR TO OR CONCURRENTLY WITH THE
MAILING OF THIS PROXY STATEMENT. EXTRA COPIES OF THE TRANSITION REPORT AND
COPIES OF THE COMPANY'S TRANSITION REPORT ON FORM 10-K TO THE SECURITIES AND
EXCHANGE COMMISSION ARE AVAILABLE UPON REQUEST, DIRECTED TO LAURA A. WEIL, CHIEF
FINANCIAL OFFICER OF THE COMPANY, AT 150 THORN HILL DRIVE, WARRENDALE,
PENNSYLVANIA 15086.
18
<PAGE> 20
PROXY -- AMERICAN EAGLE OUTFITTERS, INC.
The undersigned shareholder of American Eagle Outfitters, Inc. hereby appoints
Laura A. Weil and Dale E. Clifton, or any one of them, as attorneys and proxies
with full power of substitution to vote all of the shares of Common Stock of
American Eagle Outfitters, Inc. which the undersigned is entitled to vote at the
Annual Meeting of Shareholders of American Eagle Outfitters, Inc. to be held at
the Company's Design Center, 8 West 40th Street, 14th Floor, New York, New York,
on Monday, June 3, 1996, and at any adjournment or adjournments thereof as
follows:
1. ELECTION OF DIRECTORS.
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees
below). listed below.
(INSTRUCTIONS: Do not check "WITHHOLD AUTHORITY" to vote for only certain
individual nominees. To withhold authority to vote for any
individual nominee, strike a line through the nominee's name
below and check "FOR").
Martin P. Doolan Edward S. Finkelstein Thomas R. Ketteler
George Kolber John L. Marakas Jay L. Schottenstein
Saul Schottenstein David W. Thompson
2. In their discretion to vote upon such other matters as may properly come
before the meeting.
(Continued on Other Side)
(Continued from Other Side)
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
DIRECTORS.
Please sign and date this Proxy below and return in the enclosed
envelope.
Date:_______________________, 1996
__________________________________
(Signature)
__________________________________
(Signature)
Signature(s) shall agree with the
name(s) printed on this proxy.
If signing as attorney, executor,
administrator, trustee or
guardian, please give your full
title as such.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Proxy Card
