UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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:
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Preliminary Proxy
Statement |
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CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2)) |
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to (S)
240.14a-11(c) or (S) 240.14a-12
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American Eagle Outfitters,
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):
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No fee required.
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Fee computed on table below per
Exchange Act Rules 14a-6(i)(4) and 0-11.
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(1) Title of each class of securities
to which transaction applies:
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(2) Aggregate number of
securities to which transaction applies:
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(3)
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Per unit price or other
underlying value of transaction computed pursuant to Exchange Act Rule
0-11 (Set forth the amount on which the filing fee is calculated and state
how it was determined):
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(4) Proposed maximum aggregate value
of transaction:
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(5) Total fee paid:
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Fee paid previously with preliminary
materials.
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[_]
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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.
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(1) Amount Previously Paid:
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(2) Form, Schedule or Registration
Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
AMERICAN EAGLE
OUTFITTERS, INC.
NOTICE OF ANNUAL
MEETING OF STOCKHOLDERS
to be
held
June 13,
2000
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.
American Eagle
Outfitters, Inc.
150 Thorn Hill
Drive
Warrendale,
Pennsylvania 15086-7528
724-776-4857
NOTICE OF ANNUAL
MEETING OF STOCKHOLDERS
TO BE HELD JUNE
13, 2000
May 1,
2000
To the Stockholders
of
American Eagle
Outfitters, Inc.:
NOTICE IS
HEREBY GIVEN that the Annual Meeting of Stockholders of American Eagle
Outfitters, Inc., a Delaware corporation (the “Company”), will be
held at Loews Regency Hotel, 540 Park Avenue, New York, New York, on June
13, 2000, at 10:00 a.m., local time, for the following purposes:
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1.
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To elect four class
II directors, each for a term of three years and until their successors
are duly elected and qualified;
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2.
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To transact such
other business as may properly come before the meeting or any adjournment
thereof.
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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.
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By Order of the
Board of Directors
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Vice President,
Secretary and Treasurer
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AMERICAN EAGLE
OUTFITTERS, INC.
PROXY
STATEMENT
ANNUAL MEETING OF
STOCKHOLDERS
JUNE 13,
2000
This Proxy Statement
is furnished to the stockholders of American Eagle Outfitters, Inc., a
Delaware 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 June 13, 2000, at 10:00
a.m., local time, at the Loews Regency Hotel, 540 Park Avenue, New York, New
York, and at any adjournment thereof. It is being mailed to the stockholders
on or about May 1, 2000.
All
shares represented by properly executed proxies received by the Company
prior to the meeting will be voted in accordance with the stockholders’
directions. A proxy may be revoked, without affecting any vote previously
taken, by written notice mailed to the Company (Attention: William P. Tait,
Vice President, Secretary and Treasurer) 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 14, 2000, are
entitled to notice of and to vote at the Annual Meeting and any adjournment
or adjournments thereof. At April 14, 2000, the Company had outstanding
47,066,395 shares of Common Stock, with $.01 par value, entitled to vote at
the Annual Meeting. Each share of Common Stock 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.
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 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 shows, as of April 1, 2000, 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.
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Shares
Beneficially
Owned (1)
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Number
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Percent
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| 5% Beneficial
Owners |
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| American Express
Company (2) |
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2,761,867 |
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5.9 |
% |
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| AMVESTCAP PLC
(3) |
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3,515,350 |
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7.5 |
% |
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| Ari Deshe
(4)(5) |
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4,678,529 |
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9.7 |
% |
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| Retail
Ventures, Inc. (4) |
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6,125,450 |
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12.7 |
% |
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| Jay L.
Schottenstein (4)(5) |
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11,856,346 |
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24.6 |
% |
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| Geraldine
Schottenstein (4) |
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9,841,109 |
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20.4 |
% |
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| Directors
and Executive Officers (5) |
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| Ari Deshe
(4) |
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4,678,529 |
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9.7 |
% |
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| Jon P.
Diamond (4) |
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2,349,269 |
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4.9 |
% |
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| Martin P.
Doolan |
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64,500 |
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* |
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| Gilbert
W. Harrison |
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17,700 |
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* |
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| Michael
G. Jesselson |
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38,750 |
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* |
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| Joseph
E. Kerin |
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28,061 |
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* |
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| Thomas
R. Ketteler |
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21,930 |
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* |
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| George
Kolber |
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393,378 |
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* |
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| John L.
Marakas |
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62,250 |
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* |
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| Roger
S. Markfield |
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621,473 |
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1.3 |
% |
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| Jay L.
Schottenstein (4) |
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11,856,346 |
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24.6 |
% |
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| Saul
Schottenstein (4) |
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304,053 |
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* |
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| David
W. Thompson |
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83,316 |
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* |
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| Gerald
E. Wedren |
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26,250 |
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* |
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| Laura
A. Weil |
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95,017 |
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* |
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| Directors and executive officers as a group (17 in
group) |
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18,344,529 |
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38.1 |
% |
* Represents less than 1% of outstanding
shares
(1)
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Unless
otherwise indicated, each of the stockholders has sole voting
and dispositive power with respect to the shares of Common
Stock beneficially owned. The percent is based upon the
47,010,494 shares outstanding at April 1, 2000 and the number
of shares, if any, as to which the named person has the right
to acquire under options exercisable within 60 days of April
1, 2000.
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(2)
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Based
on Schedule 13G filed on February 3, 2000 by American Express
Company and American Express Financial Corporation, includes
1,029,200 shares with shared voting power and 2,761,867 shares
with
shared dispositive power. The address of American Express
Company is American Express Tower, 200 Vesey Street, New York,
NY 10285 and the address of American Express Financial
Corporation is IDS Tower 10, Minneapolis, MN
55440.
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(3)
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Based
on Schedule 13G filed on February 4, 2000 by AMVESCAP PLC,
reporting as parent company on behalf of AVZ, Inc., AIM
Management Group Inc., AMVESCAP Group Services, Inc., INVESCO,
Inc., and INVESCO North American Holdings, Inc., includes
shared voting and shared dispositive power for 3,515,350
shares. The addresses for AMVESCAP PLC are 11 Devonshire
Square, London EC2M 4YR, England and 1315 Peachtree Street,
N.E., Atlanta, GA 30309.
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(4)
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Members
of the Schottenstein family beneficially own a total of
19,288,178 shares of the Company, or 41.0%, as of April 1,
2000. Family members include Saul Schottenstein, Geraldine
Schottenstein, Jay Schottenstein, Ann Deshe, Susan Diamond,
and each of their spouses. Geraldine Schottenstein is the
mother and Saul Schottenstein is the uncle of Jay
Schottenstein, Ann Deshe, and Susan Diamond. The family owns
all of the stock of Retail Ventures, Inc. (“RVI”).
Jay Schottenstein serves as Chairman and Chief Executive
Officer of RVI and has or shares voting power for 69.9% of
RVI. Accordingly, he may be deemed to be the beneficial owner
of the 6,125,450 shares of the Company held by RVI and they
are included under his name in the table. Jay Schottenstein
shares voting or dispositive power as either as trustee or
trust advisor of trusts that own 5,090,329 shares, which
shares are also included under his name in the table.
Geraldine Schottenstein has sole voting and dispositive power
as trustee of trusts that own 2,420,395 shares and shares
voting or dispositive power as either trustee or trust advisor
of trusts that own 7,420,714 shares, all of which shares are
included under her name in the table. Ann Deshe shares voting
or dispositive power as either trustee or trust advisor of
trusts that own 4,650,779 shares, which shares are included
under Ari Deshe’s name in the table. Susan Diamond has
sole voting and dispositive power as trustee of trusts that
own 858,268 shares and shares voting or dispositive power as
either trustee or trust advisor of, trusts that own 1,462,126,
shares, which shares are included under Jon Diamond’s
name in the table. The business address for each of RVI and
the members of the Schottenstein family is 1800 Moler Road,
Columbus, Ohio 43207-1698.
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(5)
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Includes the following shares for options exercisable
within 60 days of April 1, 2000: Mr. Deshe–27,750; Mr.
Diamond–27,750; Mr. Doolan–64,500; Mr.
Harrison–17,250; Mr. Jesselson–8,250; Mr.
Kerin–17,834; Mr. Ketteler–17,430; Mr.
Kolber–95,000; Mr. Marakas–35,250; Mr.
Markfield–200,000; Mr. J. Schottenstein–440,500; Mr.
S. Schottenstein–22,500; Mr. Thompson–53,250; Mr.
Wedren–26,250; Ms. Weil–66,767; and directors and
officers as a group 1,144,382.
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PROPOSAL ONE: ELECTION OF
DIRECTORS
General
The Board of Directors is divided into three
classes. Each class of directors is elected for a three-year
term. The Board of Directors has nominated four candidates to be
elected at the annual meeting to serve as Class II Directors for
three year terms ending at the 2003 annual meeting or when their
successors are duly elected and qualified. All nominees are
currently directors of the Company. The terms of the remaining
nine Class III and Class I Directors expire at the annual
meetings to be held in 2001 and 2002.
The enclosed proxy, if returned duly executed and
not revoked, will be voted as specified in the proxy, or if no
instructions are given will be voted FOR each of the nominees
listed below. If any nominee should become unavailable to serve,
the Board of Directors may decrease the number of Directors
pursuant to the Bylaws 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 reelected, unable to serve.
Certain information regarding each nominee and each
incumbent Director is set forth below as of April 1, 2000,
including age, principal occupation, a brief description of
business experience during at least the last five years, and
other directorships.
Information Regarding Class II Directors With Terms Expiring
in 2000
John L. Marakas, age 73, has been retired since
April 1991. Prior to his retirement, Mr. Marakas served as
President and a director of Nationwide Corporation, and
insurance and financial services holding company from March 1972
to April 1990 and as President and a director of Nationwide Life
Insurance Company from September 1981 to April 1991. Mr. Marakas
has been a director of the Company since April 1994.
Saul Schottenstein, age 78, has been a director of
the Company and its predecessors since 1980. He has served as
President of SSC since 1984, and as 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 Shottenstein Stores Corporation
(“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. (“VCD”).
David W. Thompson, age 47, has been a director of
the Company since January 1994. Mr. 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.
Gerald E. Wedren, age 63, has been a director of the
Company since November 1997. Mr. Wedren has served as President
of Craig Capital Co., a Washington D.C. based merger and
acquisition firm since 1973. Mr. Wedren has been Managing
Partner of Tavern Real Estate Limited Partnership and Wedren
Associates, which owns and leases properties in the Washington
and Baltimore area, since 1988. Mr. Wedren was President of
G.E.W. Inc., an owner of fast food restaurants, from 1981 to
1988. Mr. Wedren is also a director of Tavern Realty
Co.
Information Regarding Class III Directors With Terms
Expiring in 2001
Jon P. Diamond, age 42, has been a director of the
Company since November 1997. Since 1996, Mr. Diamond has served
as President and Chief Operating Officer of Safe Auto Insurance
Company, a property and casualty insurance company and as
Executive Vice President and Chief Operating Officer from 1993
to 1996. Mr. Diamond served as Vice President of SSC from March
1987 to March 1993 and served in various management positions
with SSC since 1983. He also serves on the Board of Directors of
VCD.
Gilbert W. Harrison, age 59, has served as a
director of the Company since July 1997. Mr. Harrison is
Chairman of Financo, Inc., an investment and banking firm
founded in 1971. Financo provides financial advisory services to
retail, apparel and other merchandise related companies. Mr.
Harrison serves on the Board of the Fashion Institute of
Technology, the Board of The Wharton School of the University of
Pennsylvania, and the Board of the Peggy Guggenheim Collection
in Venice, Italy.
Thomas R. Ketteler, age 57, has been a director of
the Company since January 1994. Mr. 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.
Martin P. Doolan, age 60, has been a director of the
Company since August 1995. Mr. Doolan has served as Vice
Chairmain of Value City Department Stores since July 1999. Mr.
Doolan previously served as President and Chief Executive
Officer and as a director of VCD from July 1997 through June
1999. Prior to joining VCD, Mr. Doolan served 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 Chairman; Sun Engine, a
remanufacturer of
domestic automobile engines; Pilliod Cabinet Corp., a furniture
manufacturer; and Sunwest International, a brass door and
hardware manufacturer.
Information Regarding Nominees For Class I Directors
With Terms Expiring in 2002
Jay L. Schottenstein, age 45, 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 SSC, a privately-held company with
interests in retailing, real estate and manufacturing. He has
also served as Chairman since March 1992 and as Chief Executive
Officer from April 1991 through July 1997, of VCD, a company
that operates a chain of off-price department stores and is
56.3% 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 since 1976. Jay L. Schottenstein is the nephew of Saul
Schottenstein and the brother-in-law of Ari Deshe and Jon P.
Diamond.
George Kolber, age 49, 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 SSC since 1979 and as Vice
President, Administration of VCD 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.
Roger S. Markfield, age 58, 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. Mr.
Markfield became a member of the Board in March 1999. 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., 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 served as Senior Vice President of Merchandising and
Marketing for the Gap Stores, Inc.
Ari Deshe, age 49, has been a director of the
Company since November 1997. Since 1996, Mr. Deshe has served as
Chairman and Chief Executive Officer of Safe Auto Insurance
Company, a property and casualty insurance company and he served
as President and Chief Executive Officer from 1993 to 1996.
Prior to that, Mr. Deshe served as President of Safe Auto
Insurance Agency from 1992 to 1993 and President of Employee
Benefit Systems, Inc. from 1982 to 1992. He also serves on the
Board of Directors of VCD.
Michael G. Jesselson, age 48, has served as a
director of the Company since November 1997. Mr. Jesselson is
President of Jesselson Capital Corporation, a private investment
corporation headquartered in New York City. He also serves on
the Board of Directors of a number of nonprofit
institutions.
Information Concerning Board of
Directors
During the fiscal year ended January 29, 2000
(“Fiscal 1999”), the Board of Directors met seven
times. Saul Schottenstein did not attend any of the meetings.
The Board has a standing Audit Committee and a standing
Compensation and Stock Option Committee.
The members of the Audit Committee are Michael G.
Jesselson, John L. Marakas, and Gerald E.Wedren. 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 also reviews and approves the terms of any new
related party agreements. The Audit Committee met four times in
Fiscal 1999.
The members of the Compensation and Stock Option
Committee are Michael G. Jesselson, John L. Marakas, and Gerald
E. Wedren. The function of the Compensation Committee is to
consult with and advise the Chairman with respect to the
Company’s compensation policies, including compensation of
senior management. The Compensation Committee determines the
number shares and terms of option and restricted stock awards
granted under the Company’s Stock Incentive Plan. The
Compensation Committee also administers the Company’s
Management Incentive Plan. The Compensation and Stock Option
Committee met five times and acted by written consent five times
in Fiscal 1999.
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 are paid $1,000 for each
telephonic meeting. Directors who are also employees of the
Company do not receive additional compensation for serving as
directors.
The Company’s 1999 Stock Incentive Plan,
provides for the automatic grant of options to purchase 3,750
shares of Common Stock to each non-employee director on the
first trading day of each fiscal quarter. 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 or
its equivalent. The Compensation Committee may permit exercise
by tendering previously acquired shares or by other means
approved by the committee. 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. The options are
transferable by the option holders either (i) if transferred
without consideration to immediate family members, or the
entities they control, or (ii) if such transfer is approved by
the Compensation Committee.
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.
Laura A. Weil, age 43, has served as Chief Financial
Officer of the Company since December 1995. Prior to joining the
Company, she was a consultant to companies including SSC, from
March 1995 to December 1995. From 1992 to 1995, she was Senior
Vice President and the 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 to 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.
Joseph E. Kerin, age 54, 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 VCD. 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.
Michael J. Leedy, age 31, has served as Executive
Vice President of Marketing and AE Direct since June 1999. From
February 1995 to May 1999 he served as Vice President of
Marketing. Prior to joining the Company, Mr. Leedy served as
President of Method, Inc., a consulting firm providing services
to the Company.
Dale E. Clifton, age 46, has served the Company
and its predecessors as Controller since June 1986, as Chief
Accounting Officer since October 1988, and as Vice President
since October 1994. 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.
William P. Tait, age 55, has served as
Vice-President—Secretary and Treasurer since June 1996.
From May 1995 to May 1996 he served as Senior Vice President of
Finance. Prior to joining the Company, Mr. Tait was
Vice-President—Chief Financial Officer of Spartus
Corporation from 1994-1995. From 1973 to 1993 Mr. Tait held
various executive positions with the United States Shoe
Corporation including Vice President—Chief Financial
Officer of its Women’s Specialty Retailing Group from
1981-1992. From 1970-1973 Mr. Tait worked for Coopers &
Lybrand, LLP.
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 a review of the Section 16(a) forms received
by the Company, it believes that, during Fiscal 1999, all
reporting persons complied with applicable filing
requirements.
Executive Officer Compensation
The following table shows certain information
regarding compensation paid during Fiscal 1999 and each of the
last three fiscal periods to the Company’s Chief Executive
Officer and to each of the Company’s four most highly
compensated executive officers.
Summary Compensation Table
| |
|
Annual Compensation
|
|
Long
Term Compensation
|
Name
and Principal Position
|
|
Fiscal
Year
|
|
Salary
|
|
Bonus
|
|
Other Annual
Compensation
|
|
Restricted
Stock Awards
|
|
Options/
SARs (#)
|
| |
|
(1) |
|
|
|
|
|
(2) |
|
(3) |
|
|
| Jay L.
Schottenstein (4) |
|
1999 |
|
$250,050 |
|
None |
|
None |
|
None |
|
150,000 |
| Chairman and Chief |
|
1998 |
|
$250,050 |
|
None |
|
None |
|
None |
|
120,000 |
| Executive Officer |
|
1997 |
|
$250,050 |
|
None |
|
None |
|
None |
|
337,500 |
|
|
| George
Kolber |
|
1999 |
|
$600,000 |
|
$753,125 |
|
$34,045 |
|
None |
|
150,000 |
| Vice
Chairman and |
|
1998 |
|
$500,000 |
|
$275,000 |
|
$34,472 |
|
$ 401,250 |
|
105,000 |
| Chief
Operating Officer |
|
1997 |
|
$407,692 |
|
$200,000 |
|
$40,125 |
|
None |
|
225,000 |
|
|
| Roger
S. Markfield (5) |
|
1999 |
|
$612,456 |
|
$753,125 |
|
None |
|
$2,825,014 |
|
600,000 |
| President and |
|
1998 |
|
$512,460 |
|
$232,000 |
|
None |
|
$ 267,500 |
|
105,000 |
| Chief
Merchandising Officer |
|
1997 |
|
$412,464 |
|
$120,000 |
|
None |
|
None |
|
None |
|
|
| Laura
A. Weil |
|
1999 |
|
$315,016 |
|
$303,425 |
|
None |
|
None |
|
80,000 |
| Executive Vice President |
|
1998 |
|
$265,044 |
|
$102,500 |
|
None |
|
$ 292,275 |
|
64,000 |
| and
Chief Financial Officer |
|
1997 |
|
$250,016 |
|
None |
|
$38,687 |
|
None |
|
None |
|
|
| Joseph
E. Kerin |
|
1999 |
|
$225,004 |
|
$229,000 |
|
$ 5,625 |
|
None |
|
40,000 |
| Executive Vice President |
|
1998 |
|
$200,044 |
|
$ 99,775 |
|
$ 5,625 |
|
None |
|
36,000 |
| and
Director of Store Operations |
|
1997 |
|
$187,600 |
|
None |
|
$ 2,509 |
|
None |
|
22,500 |
(1)
|
1999,
1998 and 1997 refer to the twelve month periods ended January
29, 2000, January 30, 1999, and January 31, 1998,
respectively.
|
(2)
|
Includes amounts for 1999 of $28,420 for housing
allowances, and $5,625 for car allowances for Mr. Kolber and
$5,625 in car allowances for Mr. Kerin. Includes amounts for
1998 of $28,372 for housing allowances, $5,625 for car
allowances, and $475 for commuting for Mr. Kolber and $5,625
in car allowances for Mr. Kerin. Includes amounts for 1997 of
$28,925 for housing allowances and $11,200 for commuting
expenses for Mr. Kolber and $38,687 in commuting expenses for
Ms. Weil. 1997 amounts for Mr. Kerin are for a car
allowance.
|
(3)
|
The
value of the restricted stock granted in 1999 and 1998
included in the Summary Compensation Table is based on the
fair market value at the date of grant. The 1999 shares vested
on February 28, 2000 upon certification from the Compensation
Committee that the Company met certain performance goals
defined in the restricted stock agreements. The 1998 shares of
restricted stock vest 20% per year, except for the grant to
Ms. Weil of which 20% vested immediately and 20% vests each
year for the next four years. The value of the restricted
stock awarded in 1999 for Mr. Markfield was $2,339,595 based
on the fair market value of $35.09 at January 29, 2000. The
value of the restricted stock awarded in 1998 as of the end of
the fiscal year was $1,579,219 for Mr. Kolber, $1,052,813 for
Mr. Markfield, and $526,406 for Ms. Weil based on the fair
market value of $35.09 at January 29, 2000.
|
(4)
|
Jay L.
Schottenstein is also Chairman of SSC and VCD. He does not
devote his full business time to the Company.
|
(5)
|
Mr.
Markfield is employed pursuant to an employment agreement
dated September 8, 1999. It has an initial term of three years
and continues from year to year thereafter, subject to earlier
termination by either party. It provides for an annual base
salary of $600,000, eligibility for an annual cash bonus under
the Company’s Management Incentive Plan, recommended
grants of up to 200,000 restricted shares and options for
600,000 shares under the Company’s 1999 Stock Incentive
Plan, and other fringe benefits. It provides for severance
payments equal to one year of base salary and continued
medical coverage in the event of a non-cause termination by
the Company.
|
Option/Sar Grants In Last Fiscal Year
The following table sets forth certain information
regarding individual grants of stock options in Fiscal 1999 to
each of the Company’s most highly compensated executive
officers disclosed in the Summary Compensation
Table.
Name
|
|
Options/SARs
Granted (#)
|
|
% of
Total
Options/SARs
Granted to
Employees
In Fiscal Year
|
|
Exercise or
Base Price
($/Sh)
|
|
Expiration Date
|
|
Grant Date
Present
Value ($) (1)
|
| Jay L.
Schottenstein |
|
150,000 |
|
7.4 |
% |
|
$32.50 |
|
August
10, 2009 |
|
$ 3,062,340 |
| George
Kolber |
|
150,000 |
|
7.4 |
% |
|
$32.50 |
|
August
10, 2009 |
|
$ 3,062,340 |
| Roger
S. Markfield |
|
600,000 |
|
29.6 |
% |
|
$32.50 |
|
August
10, 2009 |
|
$12,249,360 |
| Laura
A. Weil |
|
80,000 |
|
3.9 |
% |
|
$32.50 |
|
August
10, 2009 |
|
$ 1,633,248 |
| Joseph
E. Kerin |
|
40,000 |
|
2.0 |
% |
|
$32.50 |
|
August
10, 2009 |
|
$ 816,624 |
(1)
|
The
grant date present value was determined using the
Black-Scholes option pricing model with the following
assumptions: risk-free interest rates of 5.5%; no dividend
yield; volatility factor of the expected market price of the
Company’s common stock of .600; weighted-average expected
life of the option of 5 years; and an expected forfeiture rate
of approximately 10%.
|
Aggregated Option Exercises In Last Fiscal Year And Fiscal
Year-End Option Values
The following table provides certain information on
the exercise of options during Fiscal 1999 and the number and
value of stock options held by the executive officers named in
the Summary Compensation Table at January 29, 2000.
| |
|
Shares
Acquired on |
|
Value |
|
Number of
Unexercised Options at
January 29, 2000 (#)
|
|
Value of Unexercised
In-The-Money Options at
January 29, 2000 ($) (1)
|
Name
|
|
Exercise (#)
|
|
Realized ($)
|
|
Exercisable
|
|
Unexercisable
|
|
Exercisable
|
|
Unexercisable
|
| Jay L
Schottenstein |
|
— |
|
— |
|
499,000 |
|
583,500 |
|
$16,469,205 |
|
$14,065,829 |
| George
Kolber |
|
205,500 |
|
$2,859,964 |
|
— |
|
549,000 |
|
— |
|
$12,738,884 |
| Roger
S. Markfield |
|
34,500 |
|
$ 778,903 |
|
— |
|
684,002 |
|
— |
|
$ 3,755,209 |
| Laura
A. Weil |
|
26,500 |
|
$ 875,282 |
|
35,300 |
|
159,200 |
|
$ 863,501 |
|
$ 2,295,092 |
| Joseph
E. Kerin |
|
25,200 |
|
$ 677,936 |
|
— |
|
100,300 |
|
— |
|
$ 1,856,606 |
(1)
|
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 January
29, 2000 of $35.09. An option is in-the-money if the fair
market value of the underlying shares exceeds price of the
option.
|
The following “Compensation Report of the
Board of Directors” and “Performance Graph” shall
not be deemed incorporated by reference by 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 and long-term components. Short-term
compensation consists of an executive officer’s annual base
salary and annual cash bonus. Long-term, equity-based
compensation can include grants of restricted stock and stock
options awards. The Compensation Committee has the authority to
advise the Chairman with respect to the Company’s overall
compensation policy, including compensation of senior
management. Beginning in Fiscal 1998, the Board of Directors
modified its historical delegation to the Chairman of the Board
of the authority to establish the annual salary and bonus
compensation of the officers of the Company, other than the
Chairman’s compensation, with the implementation of the
Company’s Management Incentive Plan (the “Incentive
Plan”). The Compensation and Stock Option Committee (the
“Compensation Committee”) of the Board of Directors
also has the authority to grant awards in the form of stock
options, stock appreciation rights, restricted stock awards,
performance units, or performance shares under the
Company’s 1999 Stock Incentive Plan (the “Stock
Plan”).
Chief Executive Officer’s
Compensation. Beginning in 1994, the
year that the Company went public, Jay L. Schottenstein, the
Company’s Chairman and Chief Executive Officer, began
receiving a salary in the amount of $250,000 per year. The Board
of Directors did not change the Chairman’s annual salary
during Fiscal 1999. The Compensation Committee did grant the
Chairman options to purchase 150,000 shares, at market value,
pursuant to the Stock Plan during Fiscal 1999. The Compensation
Committee’s determination to grant such options was based
on a number factors, including the fact that the Chairman has
never received an annual salary increase or an annual bonus, as
well as the Compensation Committee’s subjective perception
of the Chairman’s performance and his historical and
anticipated future contributions to the success of the Company.
The determination was not based on specific objective criteria
and no specific weight was given to any of the factors
considered.
Executive Officer
Compensation. The Fiscal 1999 base
salaries for the executive officers named in the Summary
Compensation Table were determined by the Compensation Committee
as a part of the Incentive Plan. Bonuses earned under the
Incentive Plan for Fiscal 1999 were paid in Fiscal 2000 and are
not included in the Summary Compensation Table. Bonuses included
in the Summary Compensation Table for Fiscal 1999 were earned in
Fiscal 1998 under the Incentive Plan. Bonuses included in the
Summary Compensation Table for Fiscal 1998 were paid in Fiscal
1997 and were earned under a prior version of the Incentive Plan
that was implemented in Fiscal 1997, except for one officer who
received an advance against his Fiscal 1997 bonus that was paid
and included in the table in Fiscal 1997. The Incentive Plan was
developed by the Compensation Committee with the assistance of
an outside compensation consultant. As a part of the Incentive
Plan, the Compensation Committee fixed annual base salaries
based on historical levels and industry averages and provided
for annual bonus payments equal to varying percentages of base
salary, with the bonus payments contingent on meeting
preestablished performance measures. The determination of base
salaries and bonus percentages was not based on specific
objective criteria. No specific weight was given to any of the
factors considered.
Stock Awards. The
Stock Plan was approved by the stockholders on June 8, 1999, for
the purpose of providing incentives to key employees of the
Company and its affiliates, consultants who provide significant
services to the Company and its affiliates, and directors of the
Company who are not employees. The Plan is intended to motivate
these individuals to further the growth and profitability of the
Company. The Compensation Committee, which administers the Stock
Plan, granted additional options, at market value, to executive
officers as set forth above under “Options/SAR Grants in
Last Fiscal Year.” The options become exercisable eight
years after the grant date, unless subject to accelerated
vesting based on annual Company performance goals. These options
expire ten years from the grant date. The determination to grant
such options was based on a number factors, including
recommendations of the Chairman and the Compensation
Committee’s subjective perception of the individual’s
performance and historical and anticipated future contributions
to the success of the Company. The determination was not based
on specific objective criteria and no specific weight was given
to any of the factors considered.
The following members of the Board of Directors
respectfully submit this report:
| Jay L.
Schottenstein |
|
Saul
Schottenstein |
|
John L.
Marakas* |
|
Martin
P. Doolan |
| George
Kolber |
|
Thomas
R. Ketteler |
|
David
W. Thompson |
|
Ari
Deshe |
| Jon P.
Diamond |
|
Gilbert
W. Harrison |
|
Michael
G. Jesselson* |
|
Gerald
E. Wedren* |
* Members of the Compensation and Stock Option
Committee.
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 14,1994, the
effective date the Company’s Common Stock was registered
under the Securities and Exchange Act of 1934, through January
29, 2000. The Company’s Common Stock is 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.
Cumulative Total Return
------------------------------------------------
7/94 7/95 1/96 1/97 1/98 1/99 1/00
AMERICAN EAGLE OUTFITTERS, INC. 100 96 38 54 209 892 947
NASDAQ STOCK MARKET (U.S) 100 140 149 195 231 361 553
S & P RETAIL (SPECIALTY APPAREL) 100 94 99 125 227 385 367
