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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14a INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
CLAIRE'S STORES, INC.
--------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
--------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
_______________________________________________________
(2) Aggregate number of securities to which transaction applies:
_______________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
_______________________________________________________
(4) Proposed maximum aggregate value of transaction:
_______________________________________________________
(5) Total fee paid:
_______________________________________________________
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
_______________________________________________________
(2) Form, Schedule or Registration Statement No.:
_______________________________________________________
(3) Filing Party:
_______________________________________________________
(4) Date Filed:
_______________________________________________________
____________
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
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CLAIRE'S STORES, INC.
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JUNE 14, 2001
------------------------
DATE: Thursday, June 14, 2001
TIME: 9:30 a.m., New York City Time
PLACE: Pierre Hotel
Wedgewood Room
2 East 61st Street
New York, New York
At the meeting, shareholders will act on the following matters:
1. Election of seven directors to serve, each for a one-year term; and
2. Any other matters properly brought before the shareholders at the
meeting.
Shareholders of record at the close of business on April 26, 2001 are
entitled to notice of, and to vote at the meeting or at any postponements or
adjournments of the meeting.
By order of the Board of Directors,
HAROLD E. BERRITT
Secretary
May 9, 2001
YOUR VOTE IS IMPORTANT
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR
NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE SIGN, DATE AND RETURN THE
ENCLOSED PROXY OR PROXIES, AS THE CASE MAY BE, AS SOON AS POSSIBLE IN THE
ENCLOSED POSTAGE PRE-PAID ENVELOPE.
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TABLE OF CONTENTS
PAGE
----
About the Meeting........................................... 1
What is the purpose of the annual meeting?............. 1
Who is entitled to notice of, and to vote at the
meeting?.............................................. 1
Who can attend the meeting?............................ 1
What constitutes a quorum?............................. 1
How do I vote?......................................... 2
Can I vote by telephone or electronically?............. 2
Can I change my vote after I return my proxy
card(s)?.............................................. 2
What are the board's recommendations?.................. 2
What vote is required to approve each item?............ 2
What are the effect of "broker non-votes"?............. 3
Who pays for the preparation of the proxy?............. 3
Can I see a list of the shareholders entitled to
vote?................................................. 3
What should I have received to enable me to vote?...... 3
Stock Ownership............................................. 4
Election of Directors....................................... 8
Management.................................................. 9
Report of the Audit Committee.......................... 10
Executive Compensation...................................... 12
Board Report on Executive Compensation................. 15
Corporate Performance Graph................................. 18
Relationship With Our Independent Auditors.................. 19
Fees Paid to Our Independent Auditors....................... 19
Miscellaneous............................................... 19
Information Concerning Shareholder Proposals................ 20
Other Matters............................................... 20
Appendix A -- Audit Committee Charter...................... A-1
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CLAIRE'S STORES, INC.
3 S.W. 129TH AVENUE
PEMBROKE PINES, FLORIDA 33027
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PROXY STATEMENT
------------------------
This proxy statement contains information related to our annual meeting of
shareholders to be held on June 14, 2001, beginning at 9:30 a.m. New York City
time, in the Wedgewood Room of the Pierre Hotel, 2 East 61st Street, New York,
New York, and at any adjournments or postponements thereof. The approximate date
that this proxy statement, the accompanying notice of annual meeting and the
enclosed form of proxy or proxies, as the case may be, are first being sent to
shareholders is May 14, 2001. You should review this information in conjunction
with our 2001 annual report to shareholders which accompanies this proxy
statement.
ABOUT THE MEETING
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
At the annual meeting, shareholders will act upon the matters outlined in
the accompanying notice of meeting, including the election of seven directors.
In addition, our management will report on the performance of Claire's during
fiscal 2001 and respond to questions from shareholders.
WHO IS ENTITLED TO NOTICE OF, AND TO VOTE AT THE MEETING?
Only shareholders of record at the close of business on the record date,
April 26, 2001, are entitled to receive notice of the annual meeting and to vote
the shares of common stock and Class A common stock that they held on that date
at the meeting, or any postponements or adjournments of the meeting. Each
outstanding share of common stock entitles its holder to cast one vote on each
matter to be voted upon and each outstanding share of Class A common stock
entitles its holder to cast ten votes on each matter to be voted upon.
WHO CAN ATTEND THE MEETING?
All shareholders as of the record date, or their duly appointed proxies,
may attend. Please note that if you hold shares in "street name" (that is,
through a broker or other nominee), you will need to bring a copy of a brokerage
statement reflecting your stock ownership as of the record date.
WHAT CONSTITUTES A QUORUM?
The presence at the meeting, in person or by proxy, of the holders of a
majority of the aggregate combined voting power of the shares of common stock
(one vote per share) and Class A common stock (ten votes per share) outstanding
as of the record date will constitute a quorum, permitting the meeting to
conduct its business. As of the record date, 45,928,561 shares of our common
stock were outstanding and 2,733,511 shares of our Class A common stock were
outstanding. Proxies received but marked as abstentions and broker
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non-votes will be included in the calculation of the number of votes considered
to be present at the meeting but will not be counted as votes cast "for" or
"against" any given matter.
If less than a majority of the aggregate combined voting power of the
outstanding shares of common stock and Class A common stock entitled to vote are
represented at the meeting, a majority of the votes present, either in person or
by proxy, at the meeting may adjourn the meeting to another date, time or place,
and notice need not be given of the new date, time or place if the new date,
time or place is announced at the meeting before an adjournment is taken.
HOW DO I VOTE?
If you complete and properly sign the accompanying proxy card(s), and
return it to us, it will be voted as you direct. If you are a registered
shareholder and you attend the meeting, you may deliver your completed proxy
card(s) in person. "Street name" shareholders who wish to vote at the meeting
will need to obtain a proxy from the institution that holds their shares.
CAN I VOTE BY TELEPHONE OR ELECTRONICALLY?
If your shares are held in "street name," please check your proxy card or
contact your broker or nominee to determine whether you will be able to vote by
telephone or electronically.
The deadline for voting by telephone or electronically is 11:59 p.m. on
June 13, 2001.
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD(S)?
Yes. Even after you have submitted your proxy card(s), you may change your
vote at any time before the proxy is exercised by filing with our Secretary
either a notice of revocation or a duly executed proxy card(s) bearing a later
date. The powers of the proxy holders will be suspended if you attend the
meeting in person and so request, although attendance at the meeting will not by
itself revoke a previously granted proxy or proxies, as the case may be.
WHAT ARE THE BOARD'S RECOMMENDATIONS?
Unless you give other instructions on your proxy card(s), the persons named
as proxy holders on the proxy card(s) will vote in accordance with the
recommendations of our board of directors. The board recommends a vote:
- for the election of the nominated slate of directors. See "Election of
Directors," page 8.
The board does not know of any other matters that may be brought before the
meeting nor does it foresee or have reason to believe that the proxy holders
will have to vote for substitute or alternate nominees for director. In the
event that any other matter should properly come before the meeting or any
nominee for director is not available for election, the proxy holders will vote
as recommended by the board of directors or, if no recommendation is given, in
accordance with their best judgment.
WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
ELECTION OF DIRECTORS. The affirmative vote of a plurality of the votes
cast, either in person or by proxy, at the meeting by the holders of the
outstanding shares of our common stock (one vote per share) and Class A common
stock (ten votes per share), voting together as a single class, is required for
the election of directors.
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A properly executed proxy marked "WITHHOLD AUTHORITY" with respect to the
election of one or more directors will not be voted with respect to the director
or directors indicated, although it will be counted for purposes of determining
whether there is a quorum. Shareholders do not have the right to cumulate their
votes for directors.
OTHER ITEMS. In the event other items are properly brought before the
shareholders at the meeting, the affirmative vote of a majority of the votes
cast (either in person or by proxy) at the meeting by the holders of the
outstanding shares of common stock (one vote per share) and Class A common stock
(ten votes per share), voting together as a single class, will be required for
approval. A properly executed proxy marked "ABSTAIN" with respect to any such
matter will not be voted, although it will be counted for purposes of
determining whether there is a quorum. Accordingly, an abstention will have the
effect of a negative vote.
WHAT ARE THE EFFECT OF "BROKER NON-VOTES"?
If you hold your shares in "street name" through a broker or other nominee,
your broker or nominee may not be permitted to exercise voting discretion with
respect to some of the matters to be acted upon. Thus, if you do not give your
broker or nominee specific instructions, your shares may not be voted on those
matters and will not be counted in determining the number of shares necessary
for approval. Shares represented by such "broker non-votes" will, however, be
counted in determining whether there is a quorum.
WHO PAYS FOR THE PREPARATION OF THE PROXY?
We will pay the cost of preparing, assembling and mailing the proxy
statement, notice of meeting and enclosed proxy card. In addition to the use of
mail, our employees may solicit proxies personally and by telephone. Our
employees will receive no compensation for soliciting proxies other than their
regular salaries. We may request banks, brokers and other custodians, nominees
and fiduciaries to forward copies of the proxy material to the beneficial owners
of both classes of our common stock and to request authority for the execution
of proxies and we may reimburse such persons for their expenses incurred in
connection with these activities.
CAN I SEE A LIST OF THE SHAREHOLDERS ENTITLED TO VOTE?
Any shareholder of record as of the record date may look at the complete
list of the shareholders that are entitled to vote at the annual meeting so long
as it is for a purpose germane to the annual meeting. The list will be available
in these circumstances, during normal business hours, at our offices located at
350 Fifth Avenue, New York, New York 10118 for a period of ten days prior to the
meeting and at the meeting itself.
WHAT SHOULD I HAVE RECEIVED TO ENABLE ME TO VOTE?
Your package from us should contain this proxy statement, the accompanying
notice of annual meeting, a common stock proxy card and/or a Class A common
stock proxy card, as applicable, and our 2001 annual report to shareholders.
This package is being mailed on or about May 14, 2001.
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STOCK OWNERSHIP
The following table shows the number of shares of common stock and Class A
common stock beneficially owned as of April 26, 2001 by the following
individuals or groups:
- each person who we know beneficially owns more than 5% of either class of
our common stock;
- each director;
- each nominee for director;
- each current executive officer named in the Summary Compensation Table on
page 12; and
- all of our directors and executive officers as a group.
Unless otherwise indicated, the address for each named person is c/o
Claire's Stores, Inc., 3 S.W. 129th Avenue, Pembroke Pines, Florida 33027 and
each named person has sole voting and investment power over the shares shown
below.
The number of shares beneficially owned by each named person is based upon
information in documents filed by such person with the Securities and Exchange
Commission, other publicly available information or information available to us.
Beneficial ownership is determined in accordance with the rules of the SEC and
generally includes voting or investment power with respect to securities. The
percentage of each class is calculated based upon the total number of shares of
each class outstanding on April 26, 2001, plus the total number of outstanding
options held by such person that are exercisable within 60 days of that date.
Shares issuable upon exercise of outstanding options, however, are not deemed
outstanding for purposes of computing percentage ownership of any other person.
SHARES OF
SHARES OF CLASS A
COMMON STOCK COMMON STOCK
BENEFICIALLY PERCENT OF BENEFICIALLY PERCENT OF
NAME AND ADDRESS OWNED CLASS OWNED CLASS
---------------- ------------ ---------- ------------ ----------
Rowland Schaefer(17)......................... 4,188,698(1) 9.1% 1,780,408(2) 65.1%
Kayne Anderson Rudnick....................... 3,172,436 6.9 -- --
Investment Management, LLC(3)
1800 Avenue of the Stars,
Second Floor
Los Angeles, California 90067
Capital Research and Management Company(4)... 2,700,000 5.9 -- --
333 South Hope Street
Los Angeles, California 90071
SMALLCAP World Fund, Inc.(4)................. 2,600,000 5.7 -- --
333 South Hope Street
Los Angeles, California 90071
FMR Corp.(5)................................. 2,306,600 5.0 --
82 Devonshire Street
Boston, Massachusetts 02109
Ira D. Kaplan(17)............................ 215,180(6) * -- --
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SHARES OF
SHARES OF CLASS A
COMMON STOCK COMMON STOCK
BENEFICIALLY PERCENT OF BENEFICIALLY PERCENT OF
NAME AND ADDRESS OWNED CLASS OWNED CLASS
---------------- ------------ ---------- ------------ ----------
Sylvia Schaefer.............................. 4,188,698(7) 9.1 1,780,408(8) 65.1
Bruce G. Miller(19).......................... 185,750 * -- --
220 South Orange Avenue
Livingston, New Jersey 07039
Irwin L. Kellner, Ph.D.(19).................. 500 * -- --
c/o Hofstra University
Hempstead, New York 11549
Steven H. Tishman(19)........................ 1,000 * -- --
c/o Robertson Stephens
1633 Broadway
New York, New York 10019
E. Bonnie Schaefer(17)....................... 50,000(9) * --(10) --
Marla L. Schaefer(17)........................ 50,000(11) * 5,692(12) *
Mark Smith(18)............................... 25,278(13) * -- --
Charles L. Ruffner........................... 1,503,562(14) 3.3 375,889(15) 13.8
c/o Charles L. Ruffner, P.A.
601 Brickell Key Drive
Suite 507
Miami, Florida 33131
All directors and current executive officers 4,716,406(16) 10.2 1,786,100 65.3
as a group (8 persons).....................
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* Less than 1% of the shares outstanding of such class.
(1) Includes (i) 142 shares held by Schaefer Family Holdings, Inc., a
corporation whose controlling shareholder is Mr. Schaefer, (ii) 1,991,164
shares held by RS Family Limited Partnership, a limited partnership whose
sole general partner is a corporation controlled by Mr. Schaefer, (iii)
1,588,655 shares held by RS Family Limited Partnership No. 2, a limited
partnership whose sole general partner is a corporation controlled by Mr.
Schaefer, and (iv) 608,737 shares held by The Rowland Schaefer Trust U/A
DTD 03/05/99, which is revocable by Mr. Schaefer and of which he is the
settlor, principal beneficiary and sole trustee. Also includes 88,125
shares subject to currently exercisable options. Does not include 1,503,562
shares held in a trust for the benefit of his children, including Bonnie
and Marla Schaefer. Mr. Schaefer disclaims beneficial ownership of all
these shares.
(2) Includes 1,780,408 shares held in a trust for the benefit of Mr. Schaefer's
wife for which he is the trustee. Does not include 189,843 shares held in a
trust for the benefit of his children, including Bonnie and Marla Schaefer,
for which Northern Trust Bank is the trustee. Does not include 375,889
shares held in a trust for the benefit of his children, including Bonnie
and Marla Schaefer. Mr. Schaefer disclaims beneficial ownership of these
shares.
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(3) Based on a Schedule 13G dated February 9, 2001 filed with the SEC by Kayne
Anderson Rudnick Investment Management, LLC. The Schedule 13G indicates
that at December 29, 2000, 3,172,436 shares of our common stock were owned
by accounts managed by Kayne Anderson Rudnick Investment Management, in its
capacity as an investment adviser. Kayne Anderson Rudnick Investment
Management disclaims beneficial ownership of these shares.
(4) Based on a Schedule 13G dated February 9, 2001 filed with the SEC jointly
by Capital Research and Management Company and SMALLCAP World Fund, Inc.
The Schedule 13G indicates that at December 29, 2000, 2,700,000 shares of
our common stock were beneficially owned by various registered investment
companies to which Capital Research and Management Company acted as an
investment adviser, including 2,600,000 shares beneficially owned by
SMALLCAP World Fund, Inc. Capital Research and Management Company disclaims
beneficial ownership of all of these shares.
(5) Based upon Amendment No. 3 to Schedule 13G dated February 13, 2001 filed
with the SEC jointly by FMR Corp., Edward C. Johnson 3d and Abigail P.
Johnson. Mr. Johnson is chairman and Ms. Johnson is a director of FMR Corp.
and may be deemed to be members of a controlling group with respect to FMR
Corp. The Amendment to Schedule 13G indicates that at December 29, 2000,
(i) Fidelity Management and Research Company, a wholly owned subsidiary of
FMR Corp., was the beneficial owner of 2,251,600 shares of our common stock
in its capacity as an investment adviser to various registered investment
companies (the power to vote such shares resides solely with the boards of
trustees of those investment companies, while the power to dispose of such
shares resides with each of Mr. Johnson and FMR Corp.), and (ii) Fidelity
Management Trust Company, a bank that is wholly owned by FMR Corp., was the
beneficial owner of 55,000 shares of our common stock (the power to vote or
dispose of such shares resides with each of Mr. Johnson and FMR. Corp.).
(6) Includes 81,755 shares issuable upon the exercise of currently exercisable
stock options and options exercisable within 60 days.
(7) Includes the shares beneficially owned by Mr. Schaefer referred to in
footnote (1) to the table. Does not include 1,503,562 shares held in a
trust for the benefit of Mrs. Schaefer's children, including Bonnie and
Marla Schaefer. Mrs. Schaefer disclaims beneficial ownership as to these
shares.
(8) Includes 1,780,408 shares held in a trust for the benefit of Mrs. Schaefer
and her husband for which her husband is the trustee. Does not include
189,843 shares held in a trust for the benefit of Mrs. Schaefer's children,
including Bonnie and Marla Schaefer, for which Northern Trust Bank is the
trustee, nor 375,889 shares held in a trust for the benefit of Mrs.
Schaefer's children, including Bonnie and Marla Schaefer. Mrs. Schaefer
disclaims beneficial ownership as to these shares.
(9) Includes 50,000 shares subject to currently exercisable stock options and
options exercisable within 60 days. Does not include 501,187 shares held
for the benefit of Ms. Schaefer under the trust referred to in footnotes
(1) and (7) to the table, as to which Ms. Schaefer has no present voting or
investment power.
(10) Does not include 163,264 shares held for the benefit of Ms. Schaefer under
the trusts referred to in footnotes (2) and (8) to the table, as to which
Ms. Schaefer has no present voting or investment power.
(11) Includes 50,000 shares subject to currently exercisable stock options and
options exercisable within 60 days. Does not include 501,187 shares held
for the benefit of Ms. Schaefer under the trust referred to in footnotes
(1) and (7) to the table, as to which Ms. Schaefer has no present voting or
investment power.
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(12) Does not include 163,264 shares held for the benefit of Ms. Schaefer under
the trusts referred to in footnotes (2) and (8) to the table, as to which
Ms. Schaefer has no present voting or investment power.
(13) Includes an aggregate of 7,778 shares issuable upon the exercise of stock
options currently exercisable and exercisable within 60 days.
(14) Represents 1,503,562 shares held in a trust for the benefit of certain of
Mr. and Mrs. Schaefer's children for which Mr. Ruffner is the trustee and
as to which shares he disclaims beneficial ownership.
(15) Represents 375,889 shares held in a trust for the benefit of certain of Mr.
and Mrs. Schaefer's children for which Mr. Ruffner is trustee and as to
which shares he disclaims beneficial ownership.
(16) Includes an aggregate of 269,880 shares issuable upon the exercise of stock
options currently exercisable and exercisable within 60 days.
(17) The named individual is a director, a nominee for director and an executive
officer of Claire's.
(18) The named individual is an executive officer of our subsidiary, Claire's
Accessories UK, Ltd.
(19) The named individual is a director and a nominee for director.
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ELECTION OF DIRECTORS
The seven persons set forth below, each of whom is currently a director,
are proposed to be re-elected as directors at the annual meeting. If elected,
each of these directors will hold office until the next annual meeting of
shareholders in the year 2002 or until his or her successor is duly elected and
qualified. If a nominee becomes unavailable to serve as a director, the board
may designate a substitute nominee.
GENERAL INFORMATION ABOUT NOMINEES. All of the nominees are currently
directors. Each has agreed to be named in this proxy statement and to serve as a
director if elected. The following table sets forth certain information with
respect to the director nominees. For additional information regarding the
nominees for director who also serve as executive officers of ours, see
"Management."
PRESENT POSITION DIRECTOR OF
WITH THE COMPANY, PRINCIPAL THE COMPANY
NAME AGE OCCUPATION AND BUSINESS EXPERIENCE SINCE
---- --- ---------------------------------------------- -----------
Rowland Schaefer.................. 84 President, Chief Executive Officer and 1961
Chairman of the Board of Directors of Claire's
Ira D. Kaplan..................... 42 Senior Vice President and Chief Financial 1999
Officer of Claire's
Bruce G. Miller................... 59 Director of Claire's; Managing Director, 1983
Financial Institutions Group, of Ryan, Beck &
Co., LLC since July 1992
Irwin L. Kellner, Ph.D............ 62 Director of Claire's; Chief Economist of CBS 1998
Marketwatch since April 1998; Weller
Professor of Economics at Hofstra University
since August 1997; Chief Economist of Chase
Manhattan's Regional Bank from January 1996
until February 1997; Chief Economist of
Chemical Bank from January 1992 until
January 1996; Chief Economist of
Manufacturers Hanover Trust from June 1980
until January 1992
Steven H. Tishman................. 44 Director of Claire's; Managing Director of 1998
Robertson Stephens since November 1999; Senior
Managing Director of Bear, Stearns & Co.
Inc. from July 1993 until November 1999
Marla L. Schaefer (1)............. 51 Vice Chairman of the Board of Directors of 1990
Claire's since March 1998; Senior Vice
President of Claire's Boutiques since April
1998; Vice President of Fashion
Merchandising of Claire's Boutiques from
April 1990 until April 1998
E. Bonnie Schaefer (1)............ 48 Vice Chairman of the Board of Directors of 1998
Claire's since January 1999; Vice
President -- Real Estate of Claire's
Boutiques since 1994
---------------
(1) Ms. Schaefer is the daughter of Mr. Rowland Schaefer, our President, Chief
Executive Officer and Chairman of the Board.
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VOTE REQUIRED. The election of directors will be decided by a plurality of
the votes cast, either in person or by proxy, at the meeting by the holders of
the outstanding shares of our common stock (one vote per share) and Class A
common stock (ten votes per share), voting together as a single class.
The board of directors has no reason to believe that any nominee will
refuse to act or be unable to accept election; however, in the event that a
nominee for a directorship to be elected is unable to accept election or if any
other unforeseen contingencies should arise, it is intended that proxies will be
voted for the remaining nominee and for such other person as may be designated
by the board of directors, unless directed by a proxy to do otherwise.
THE BOARD RECOMMENDS SHAREHOLDERS TO VOTE "FOR" EACH OF THE NOMINEES FOR
DIRECTOR SET FORTH ABOVE.
MANAGEMENT
The following table sets forth the names, ages, positions and backgrounds
of our current executive officers, including an executive officer of Claire's
Accessories UK, Ltd. Each of these executive officers serves until the election
and qualification of such individual's successor or until his or her death,
resignation or removal by the board of directors of the respective company.
NAME AGE POSITION
---- --- --------------------------------------------------------
Chairman of the Board, President and Chief Executive
Rowland Schaefer..................... 84 Officer
Ira D. Kaplan........................ 42 Senior Vice President and Chief Financial Officer
Marla L. Schaefer.................... 51 Vice Chairman of the Board
E. Bonnie Schaefer................... 48 Vice Chairman of the Board
Mark Smith........................... 43 Chief Executive of Claire's Accessories UK, Ltd.
ROWLAND SCHAEFER has been our Chairman of the Board, President and Chief
Executive Officer since our inception in 1961.
IRA D. KAPLAN has been our Chief Financial Officer since September 1990 and
our Senior Vice President since April 1997.
MARLA L. SCHAEFER has been Vice Chairman of our Board since March 1998 and
Senior Vice President of Claire's Boutiques, Inc. since April 1998. Ms. Schaefer
served as Vice President of Fashion Merchandising of Claire's Boutiques, Inc.
from April 1990 until April 1998.
E. BONNIE SCHAEFER has been Vice Chairman of our Board since January 1999
and Vice President -- Real Estate of Claire's Boutiques, Inc. since 1994.
MARK SMITH has been the Chief Executive of Claire's Accessories UK, Ltd.
since February 1996. From September 1986 until our acquisition of Bow Bangles,
PLC in February 1996, Mr. Smith served as the Chief Executive of Bow Bangles,
PLC.
MEETING ATTENDANCE AND COMMITTEES OF THE BOARD
Our business is managed under the direction of the board. The board meets
during our fiscal year to review significant developments affecting us and to
act on matters requiring board approval. The board held six formal meetings
during the fiscal year ended February 3, 2001. All of our directors attended at
least 75% of the board meetings.
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The board has a standing audit committee, which currently consists of Dr.
Kellner and Messrs. Miller and Tishman. The members of the audit committee are
independent as defined by the listing standards of the New York Stock Exchange.
The audit committee represents the board in its relations with our independent
public accountants and overseas the financial reporting and disclosures prepared
by our management. The functions of the audit committee and its activities
during fiscal 2001 are described below under the heading "Report of the Audit
Committee."
The board has a stock option committee, which currently consists of Dr.
Kellner and Messrs. Miller and Tishman. The stock option committee is
responsible for administering the Company's stock option plans. During fiscal
2001, the stock option committee met two times.
During fiscal 2001, the board appointed a special compensation committee,
consisting of Dr. Kellner and Messrs. Miller and Tishman, for the sole purpose
of developing and recommending to the board an incentive compensation plan for
our Chairman. Upon the special compensation committee's recommendation, the
board approved, and submitted for shareholder approval, the 2000 Incentive
Compensation Plan for our Chairman of the Board. Our shareholders approved this
Incentive Compensation Plan at last year's annual meeting. The special
compensation committee is responsible for administering this plan. During fiscal
2001, the special compensation committee did not meet.
The board does not have a standing executive, nominating or compensation
committee (except for the stock option committee and special compensation
committee described above) or any other committee performing a similar function.
The functions customarily attributable to these committees are performed by the
board as a whole.
REPORT OF THE AUDIT COMMITTEE
The following Report of the Audit Committee does not constitute soliciting
material and should not be deemed filed or incorporated by reference in any
other filing by us under the Securities Act of 1933 or the Securities Exchange
Act of 1934.
The audit committee's role is to act on behalf of the board of directors in
the oversight of all material aspects of our corporate financial reporting and
our external audit, including, among other things, our internal control
structure, the results and scope of the annual audit and other services provided
by our independent auditors and our compliance with legal requirements that have
a significant impact on our financial reports. Although management has the
primary responsibility for the financial statements and the reporting process
including the systems of internal controls, the audit committee consults with
management and our independent auditors regarding the preparation of financial
statements and, as appropriate, initiates inquiries into aspects of our
financial affairs. In addition, the audit committee has the responsibility to
consider and recommend the appointment of, and to review fee arrangements with,
our independent auditors. A full description of the audit committee's primary
responsibilities, operating principles and relationship with internal and
external auditors is contained in the Audit Committee Charter that it has
adopted, which is attached to this proxy statement as Appendix A. During fiscal
2001, the audit committee met one time.
In fulfilling its oversight responsibilities, the audit committee reviewed
the audited financial statements for fiscal 2001 with management including a
discussion of the quality of the accounting principles, the reasonableness of
significant judgments and the clarity of disclosures in the financial
statements. The audit committee reviewed the financial statements for fiscal
2001 with the independent auditors and discussed with them all of the matters
required to be discussed by Statement of Auditing Standards No. 61, including
the auditors' judgments as to the quality, not just the acceptability, of our
accounting principles. In addition, the
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audit committee has received the written disclosures and the letter from the
independent auditors required by Independent Standards Board No. 1 and has
discussed with the independent auditors their independence from management and
Claire's. Finally, the audit committee has considered whether the provision by
the independent auditors of non-audit services to Claire's is compatible with
maintaining the auditors' independence.
The members of the audit committees are not professionally engaged in the
practice of auditing or accounting and are not experts in the fields of
accounting or auditing, including in respect of auditor independence. Members of
the audit committee rely without independent verification on the information
provided to them and on the representations made by management and the
independent auditors. Accordingly, the audit committee's oversight does not
provide an independent basis to determine that management has maintained
appropriate accounting and financial reporting principles or appropriate
internal controls and procedures designed to assure compliance with accounting
standards and applicable laws and regulations. Furthermore, the audit
committee's considerations and discussions referred to above do not assure that
the audits of the financial statements have been carried out in accordance with
generally accepted auditing standards, that the financial statements are
presented in accordance with generally accepted accounting principles or that
the auditors are in fact "independent."
In reliance on the reviews and discussions referred to above, the audit
committee recommended to the board of directors that the audited financial
statements for fiscal 2001 be included in the Annual Report on Form 10-K for the
year ended February 3, 2001 for filing with the SEC.
MEMBERS OF THE AUDIT COMMITTEE
Irwin L. Kellner, Ph.D.
Bruce G. Miller
Steven H. Tishman
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EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation awarded
to, earned by or paid to our chief executive officer and four other of our other
most highly compensated executive officers (one of whom is an executive officer
of our wholly owned subsidiary, Claire's Accessories UK, Ltd.) who served in
such capacities as of February 3, 2001 and one of our former executive officers,
collectively referred to below as the "named executive officers," for services
rendered to us during each of the past three fiscal years.
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
-------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------------------------- ------------------------ ----------
OTHER
ANNUAL RESTRICTED SECURITIES ALL OTHER
FISCAL COMPENSATION STOCK UNDERLYING LTIP COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) (1)($) AWARD(S)($) OPTIONS(#) PAYOUTS($) ($)(2)
--------------------------- ------ --------- -------- ------------ ----------- ---------- ---------- ------------
Rowland Schaefer........... 2001 1,000,000 500,000 0 0 300,000 0 0
Chairman of the Board, 2000 1,000,000 0 0 0 0 0 0
President and Chief 1999 1,000,000 0 0 0 0 0 0
Executive Officer of
Claire's
Ira D. Kaplan.............. 2001 331,273 200,000 0 0 0 0 13,166
Senior Vice President, 2000 300,000 100,000 0 0 100,000 0 13,369
Chief Financial 1999 225,000 100,000 0 0 0 0 3,027
Officer and Treasurer of
Claire's
Marla L. Schaefer.......... 2001 327,115 125,000 0 0 0 0 12,719
Vice Chairman of the Board 2000 297,115 100,000 0 0 25,000 0 8,577
of Directors of Claire's 1999 256,000 50,000 0 0 0 0 3,267
E. Bonnie Schaefer......... 2001 252,315 125,000 0 0 0 0 10,556
Vice Chairman of the Board 2000 268,269 125,000 0 0 25,000 0 9,013
of Directors of Claire's 1999 182,000 60,000 0 0 0 0 3,163
Mark Smith................. 2001 328,125 195,900 0 0 0 0 0
Chief Executive of 2000 -- -- -- -- -- -- --
Claire's Accessories UK, 1999 -- -- -- -- -- -- --
Ltd.
Marty Nealon............... 2001 433,237 0 0 0 300,000 0 0
Former President and Chief 2000 -- -- -- -- -- -- --
Operating Officer of 1999 -- -- -- -- -- -- --
Claire's Boutiques, Inc.
---------------
(1) No amounts for executive perquisites and other personal benefits, securities
or property are shown because the aggregate dollar amount per executive is
the lesser of either $50,000 or 10% of annual salary and bonus.
(2) For fiscal year 1999, amounts represent matching contributions by us under
our 401(k) profit sharing plan. For the fiscal years 2000 and 2001, amounts
represent matching contributions by us under our 401(k) profit sharing plan
and our management deferred compensation plan.
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STOCK OPTION GRANTS
The following table provides information on the grant of stock options to
the named executive officers during the fiscal year ended February 3, 2001.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
------------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED
SECURITIES % OF TOTAL ANNUAL RATES OF STOCK
UNDERLYING OPTIONS EXERCISE PRICE APPRECIATION
OPTIONS GRANTED TO OR BASE FOR OPTION TERM(2)
GRANTED EMPLOYEES IN PRICE EXPIRATION ----------------------
NAME (#)(1) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
---- ---------- ------------ -------- ---------- ---------- ----------
Rowland Schaefer............... 300,000 50 17.81 02/16/10 3,309,362 8,434,441
Ira D. Kaplan.................. 0 N/A N/A N/A N/A N/A
Marla L. Schaefer.............. 0 N/A N/A N/A N/A N/A
Bonnie E. Schaefer............. 0 N/A N/A N/A N/A N/A
Mark Smith..................... 0 N/A N/A N/A N/A N/A
Marty Nealon................... 300,000 50 17.81 02/16/10 N/A N/A
---------------
(1) Represents options to purchase shares of common stock, which were granted at
fair market value on February 16, 2001. Subject to earlier vesting upon a
change of control (as defined), the options vest and become exercisable in
five equal annual installments commencing on the first anniversary of the
date of grant so long as the employee is employed by us or any of our
subsidiaries.
(2) The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by the rules of the Securities and Exchange Commission. The
actual value, if any, that an executive officer may realize will depend on
the excess of the stock price over the exercise price on the date the option
is exercised. There is no assurance the value realized by an executive
officer will be at or near the assumed 5% or 10% levels. No potential
realizable value was calculable for Ms. Nealon's options because such
options were forfeited upon her cessation as an executive officer.
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OPTION EXERCISES AND YEAR-END VALUES
The following table sets forth certain information concerning each exercise
of stock options during the fiscal year ended February 3, 2001 by each of the
named executive officers and the number and value of unexercised options held by
each of the name executive officers on February 3, 2001.
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL
YEAR END(#) YEAR-END($)(2)
SHARES ----------------- ----------------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($)(1) UNEXERCISABLE UNEXERCISABLE
---- ----------- -------------- ----------------- ----------------------
Rowland Schaefer................... N/A N/A 37,500/300,000 14,750/327,000
Ira D. Kaplan...................... N/A N/A 81,755/93,245 73,748/0
Marla L. Schaefer.................. N/A N/A 50,000/25,000 49,165/0
Bonnie E. Schaefer................. N/A N/A 50,000/25,000 49,165/0
Mark Smith......................... N/A N/A 61,110/288,890 35,277/123,472
Marty Nealon....................... N/A N/A N/A/N/A N/A/N/A
---------------
(1) Represents the difference between the exercise prices and the fair market
value of the common stock on the dates of exercise.
(2) Represents the difference between the closing price of the common stock on
the New York Stock Exchange on February 2, 2001 ($19.69) and the exercise
price of the options.
COMPENSATION OF DIRECTORS
Our non-employee directors currently receive an annual retainer of $35,000
and are entitled to reimbursement for out-of-pocket expenses incurred in
connection with the attendance at board of directors and committee meetings.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The board of directors has not established a compensation committee, except
for the stock option committee and the special compensation committee.
All decisions regarding the compensation of executive officers, with the
exception of those made by the stock option committee and the special
compensation committee, are determined by the board of directors as a whole. All
directors participated in deliberations of the board of directors concerning
annual performance-based compensation for the year ended February 3, 2001.
Rowland Schaefer, Marla L. Schaefer and E. Bonnie Schaefer are officers and
employees of Claire's or Claire's Boutiques. Each management director is asked
to excuse himself or herself from discussions and decisions regarding his or her
performance and compensation.
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BOARD REPORT ON EXECUTIVE COMPENSATION
The following Report on Executive Compensation and the performance graph
included elsewhere in this proxy statement do not constitute soliciting material
and should not be deemed filed or incorporated by reference in any other filing
by us under the Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent that we specifically incorporate this report or the
performance graph by reference therein.
The board of directors (through the stock option committee and the special
compensation committee) administers our executive compensation program which is
structured to promote the achievement of our business goals and, thereby, to
maximize corporate performance and shareholder return. Our executive
compensation is based primarily upon
- base salary;
- grants of stock options; and
- special achievement bonuses.
The board believes that it is important to have stock incentives constitute
a portion of each executive's compensation package in order to help align
executive and shareholder interests. In determining the total amount and mixture
of the compensation package for each executive officer, the board considers the
overall value to each executive of his or her compensation package in light of
numerous factors, including:
- competitive position;
- individual performance, including the expected contribution to our goals
by each executive officer; and
- our long-term needs and goals, including attracting and retaining key
management personnel.
The overall objectives of this strategy are as follows:
- to attract and retain the best possible executive talent;
- to motivate our executives to achieve goals inherent in our business
strategy; and
- to link executive and shareholder interests and to provide a compensation
package that recognizes individual contributions as well as overall
business results.
In the final quarter of each fiscal year, the board reviews and approves an
annual salary plan for our senior executives for the succeeding fiscal year. In
formulating the plan, key executive positions are defined carefully in terms of
scope and responsibility, job complexity, knowledge and experience required, and
other relevant factors. Executive positions are ranked internally on the basis
of these criteria, and a logical value relationship is established among them.
The board also obtains and analyzes comparative industry, peer group and
national compensation surveys. By reviewing the comparative industry data and
other surveys, the board develops salary ranges for all senior executive
positions and agrees upon each executive's base salary within the range, taking
into account certain past performance factors, including how well objectives
contributing to our success have been met by the executive, how well the
executive's responsibilities have been fulfilled, the executive's growth in
qualifications for the job, the executive's experience and accomplishment of
personal goals and other aspects of performance, and the anticipated future
contributions of the executive.
We have also relied upon stock options to reward and incentivize the
performance of executives. The board believes that stock options have been and
remain an excellent vehicle for compensating our employees. Because the option
exercise price for the employees generally equals or exceeds the price of our
common stock
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on the date of grant, employees recognize a gain only if the value of our common
stock increases. As a result, options effectively align the interests of our
executive officers with our shareholders by tying a significant portion of each
executive's total long-term compensation to our continued growth and
appreciation of our shares. Also, the stock ownership gives employees a greater
personal stake in us.
In general, stock options granted to executive officers vest in equal
annual installments over periods of four to nine years commencing on the first
anniversary of the date of grant, so long as the executive remains employed with
us or any of our subsidiaries. The size of the individual option grants are
generally based upon competitive practice and the position level of the
executive officer.
The compensation paid to Rowland Schaefer, our Chairman of the Board,
President and Chief Executive Officer, in the fiscal year ended February 3, 2001
is reflected in the table under "Executive Compensation-Summary Compensation
Table" above. The base salary paid to Mr. Schaefer during the fiscal year ended
February 3, 2000 was within the salary range developed by the board of directors
based upon the base salaries of chief executive officers of comparable companies
in the compensation surveys reviewed by the board of directors and took into
account Mr. Schaefer's active role in our management, our financial performance
during the prior fiscal year and the challenges and expectations for us in
fiscal 2002, Mr. Schaefer's stature within the industry as a spokesman for
Claire's and his more than 30 years of service as our senior executive officer.
At the 2000 annual meeting, our shareholders approved the 2000 incentive
compensation plan which provides for the annual payment of additional incentive
compensation to Mr. Schaefer based upon the percentage increase in our
consolidated pre-tax income. However, because there was no increase in our
consolidated pre-tax income for fiscal 2001, no amounts were paid to him under
the plan.
The base salary of Ira Kaplan, our Chief Financial Officer, has been fixed
at a level which the board believes is competitive with amounts paid to senior
executives with comparable qualifications, experience and responsibilities.
In 1993, Section 162(m) was added to the Internal Revenue Code of 1986, as
amended. This section generally provides that no publicly held company shall be
permitted to deduct compensation in excess of $1 million paid in any taxable
year to its chief executive officer or any of its four other highest paid
officers unless:
- the compensation is payable solely on account of the attainment of
performance goals;
- the performance goals are determined by a compensation committee of two
or more outside directors;
- the material terms under which compensation is to be paid are disclosed
to and approved by the shareholders of the company; and
- the compensation committee certifies that the performance goals were met.
The effect of Section 162(m) is applicable to us only in the case of our
Chairman as he is the only of our current executive officers who has received
compensation in excess of $1 million. The board currently intends to structure
performance-based compensation, including stock option grants and annual
bonuses, to other executive officers who may be subject to Section 162(m) in a
manner that satisfies those requirements. We
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believe that our stock option plans and the 2000 incentive compensation plan for
our Chairman have been structured in a manner that satisfies the requirements of
Section 162(m).
The foregoing information is provided by our board of directors.
Rowland Schaefer
Ira Kaplan
Irwin L. Kellner, Ph.D.
Bruce G. Miller
Marla L. Schaefer
E. Bonnie Schaefer
Steven H. Tishman
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We lease from Rowland Schaefer & Associates (formerly Two Centrum Plaza
Associates) approximately 33,000 square feet in Pembroke Pines, Florida, for our
executive, accounting and finance offices. Rowland Schaefer & Associates is a
general partnership of two corporate general partners which are owned by
immediate family members of our Chairman of the Board, two of whom, namely Marla
L. Schaefer and E. Bonnie Schaefer, serve as directors on our board. Our annual
base rent is approximately $574,000, and the lease provides for annual
cost-of-living increases and a proportionate share of all taxes and operating
expenses of the building. We exercised a five year option under the lease. The
expiration date under the option period is September 30, 2005. The board of
directors believes, based upon the report of an independent committee of the
board, that the terms of the lease are no less favorable to us than those which
would be obtained from an independent third party.
See also "Compensation Committee Interlocks and Insider Participation."
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CORPORATE PERFORMANCE GRAPH
The following graph compares the cumulative total return of an investment
in our common stock with an investment in the S&P 500 Stock Index and the S&P
Retail (Specialty Apparel) Index for the five fiscal years ending February 3,
2001. This graph assumes the investment of $100 in our common stock, the S&P 500
and the S&P Retail (Specialty Apparel) Index on January 31, 1996 and assumes
dividends are reinvested. Measurement points are on the last trading day of each
of the five fiscal years.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG CLAIRE'S STORES, INC., THE S&P 500 INDEX
AND S&P RETAIL (SPECIALTY APPAREL) INDEX
S&P RETAIL (SPECIALTY
CLAIRE'S STORES, INC. S&P 500 APPAREL)
--------------------- ------- ---------------------
Jan-96 $ 100.00 $ 100.00 $ 100.00
Jan-97 $ 168.49 $ 126.34 $ 126.62
Jan-98 $ 211.19 $ 160.34 $ 229.87
Jan-99 $ 236.76 $ 212.43 $ 390.40
Jan-00 $ 226.81 $ 234.41 $ 372.26
1-Jan $ 240.46 $ 232.30 $ 347.60
---------------
* $100 invested on 01/31/96 in stock or index -- including reinvestment of
dividends, fiscal year ending January 31.
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RELATIONSHIP WITH OUR INDEPENDENT AUDITORS
The firm of KPMG LLP has been our independent auditors since 1993 and will
be our independent auditors for the current fiscal year unless the board of
directors deems it advisable to make a substitution. One or more representatives
of the firm is expected to attend the meeting and be available to respond to any
appropriate questions. These representatives will be given an opportunity to
make statements at the meeting if they so desire.
FEES PAID TO OUR INDEPENDENT AUDITORS
The rules of the SEC require us to disclose fees billed by our independent
auditors for services rendered to us for the fiscal year ended February 3, 2001.
AUDIT FEES
The aggregate fees billed by KPMG LLP for professional services rendered
for the audit of our annual financial statements for the fiscal year ended
February 3, 2001 and for the reviews of the financial statements included in our
Quarterly Reports on Form 10-Q for that fiscal year were $317,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
KPMG LLP billed no fees for professional services rendered to us for
information technology services relating to financial information systems design
and implementation for the fiscal year ended February 3, 2001.
ALL OTHER FEES
The aggregate fees billed by KPMG LLP for services rendered to us, other
than the services described above under "Audit Fees" and "Financial Information
Systems Design and Implementation Fees," for the fiscal year ended February 3,
2001 were $286,000.
MISCELLANEOUS
ANNUAL REPORT ON FORM 10-K
We have mailed copies of our annual report with this proxy statement to
holders of shares of common stock and Class A common stock as of the record
date, April 26, 2001. We will provide without charge, to each holder of shares
of common stock and Class A common stock as of the record date, a copy of our
annual report on Form 10-K for the fiscal year ended February 3, 2001 as filed
with the SEC on the written request of any such holder addressed to our Director
of Investor Relations at Claire's Stores, Inc., 3 S.W. 129th Avenue, Pembroke
Pines, Florida 33027.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act requires our directors and
executive officers, as well as persons who own more than 10% of a registered
class of our equity securities, collectively referred to as the reporting
persons, to file reports of initial beneficial ownership and changes in
beneficial ownership on Forms 3, 4 and 5 with the SEC and the New York Stock
Exchange. Such reporting persons are also required by SEC regulations to furnish
us with copies of all such reports that they file.
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To our knowledge, based solely on a review of the copies of such reports
furnished to us and representations that no other reports were required, during
and with respect to the fiscal year ended February 3, 2001, all reporting
persons have timely complied with all filing requirements applicable to them,
except that Ms. Nealon, a former executive officer, filed her initial report on
Form 3 in an untimely manner.
INFORMATION CONCERNING SHAREHOLDER PROPOSALS
Shareholders interested in presenting a proposal to be considered for
inclusion in the proxy statement for presentation at the 2002 annual meeting of
shareholders may do so by following the procedures prescribed in SEC Rule 14a-8.
To be eligible for inclusion, shareholder proposals must be received by us on or
before January 9, 2002.
Shareholders interested in presenting a proposal for consideration at the
2002 annual meeting of shareholders must submit the proposal to and be received
by us on or before April 6, 2002. If a proposal is not submitted and received by
that date, the persons named in our proxy for the 2002 annual meeting will be
allowed to exercise their discretionary authority to vote upon any such proposal
without the matter having been discussed in the proxy statement for the 2002
annual meeting.
OTHER MATTERS
As of the date of this proxy statement, we are not aware of any matter to
be presented for action at the meeting other than the matters set forth above.
If any other matter is properly brought before the meeting for action by
shareholders, proxies in the enclosed form returned to us will be voted in
accordance with the recommendation of the board of directors or, in the absence
of such a recommendation, in accordance with the judgment of the proxy holders.
By order of the board of directors,
ROWLAND SCHAEFER
Chairman of the Board and President
May 9, 2001
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APPENDIX A
CHARTER OF THE AUDIT COMMITTEE OF
CLAIRE'S STORES, INC.
PURPOSE AND SCOPE
This Charter governs the operations of the Audit Committee (the
"Committee") of the Board of Directors (the "Board") of Claire's Stores, Inc., a
Delaware corporation (the "Company"). The purpose of the Committee is to assist
the Board in fulfilling its responsibilities to oversee:
- the financial reports and other financial information provided by the
Company to any governmental or regulatory body, the public, or any other
user of such financial statements;
- the Company's systems of internal accounting and financial controls;
- the independence and performance of the Company's outside auditors; and
- compliance by the Company with any legal compliance and ethics programs
as may be established by the Board and the Company's management from
time-to-time.
In fulfilling its obligations, the Committee shall maintain free and open
communications between the Committee and the Company's:
- independent auditors,
- internal accounting staff, and
- management.
In discharging its oversight role, the Committee is empowered to
investigate any matter brought to its attention with full access to all books,
records, facilities, and personnel of the Company. The Committee is authorized
to retain outside or special counsel, auditors, accounting or other consultants,
experts, and professionals for this purpose.
The Committee may request any officer or employee of the Company or any of
its subsidiaries or the Company's outside counsel or independent auditors to
attend a meeting of the Committee or to meet with any members of, or consultants
or advisors to, the Committee.
The Committee shall review and reassess the adequacy of this Charter
annually and recommend any proposed changes to the Board for approval. This
Charter shall be published as an appendix to the Company's Proxy Statement for
the Company's annual meeting of shareholders to the extent required by the rules
and regulations of the Securities and Exchange Commission.
MEMBERS OF THE COMMITTEE
The Committee shall be comprised of not less that three members of the
Board. The members of the Committee shall meet all "independence" and
qualification requirements of the rules and regulations of the New York Stock
Exchange, as such rules and regulations may be amended or supplemented from
time-to-time. Accordingly, each member of the Committee must be a director who:
- has no relationship to the Company that may interfere with the exercise
of his or her independent judgment; and
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25
- is financially literate or who becomes financially literate within a
reasonable period of time after appointment to the Committee.
In addition, at least one member of the Committee must have accounting or
related financial management expertise.
Under exceptional and limited circumstances, however, one director who is a
former employee of the Company or an immediate family member of a former
executive officer of the Company or any of its affiliates, but who fails to meet
the independence requirements due to the three-year restriction period imposed
by the rules and regulations of the New York Stock Exchange, may serve on the
Committee if:
- the Board determines in its business judgment that membership on the
Committee by the individual is required in the best interests of the
Company and its shareholders, and
- the Company otherwise complies with all other requirements of the rules
and regulations of the New York Stock Exchange with respect to
non-independent members of the Committee, as such rules and regulations
may be amended or supplemented from time-to-time.
KEY RESPONSIBILITIES AND PROCESSES
The primary responsibility of the Committee is to oversee the Company's
financial reporting process on behalf of the Board and to report the results of
the Committee's activities to the Board. The Committee recognizes that
management shall be responsible for preparing the Company's financial statements
and the independent auditors shall be responsible for auditing those financial
statements. The functions set forth below shall be the principal recurring
activities of the Committee in carrying out its oversight function. In carrying
out its responsibilities, however, the Committee shall remain flexible in order
to best react to changing conditions and circumstances. The following functions
are set forth as a guide with the understanding that the Committee may deviate
from this guide and supplement these functions as the Committee deems
appropriate under the circumstances.
1. The Committee shall have a clear understanding with management and the
independent auditors that the independent auditors are ultimately
accountable to the Board and the Committee, as representatives of the
Company's shareholders. The Committee and the Board shall have the
ultimate authority and responsibility to select (or to nominate for
shareholder approval) the independent auditors, to approve the fees to
be paid to the independent auditors, to evaluate the performance of the
independent auditors, and, if appropriate, to replace the independent
auditors.
2. The Committee shall discuss with management and the independent auditors
the overall scope and plans for the audit, including the adequacy of
staffing and the compensation to be paid to the independent auditors.
The Committee also shall discuss with management and the independent
auditors the adequacy and effectiveness of the Company's accounting and
financial controls, including the Company's system to monitor and manage
business risk, as well as legal and ethical compliance programs. To the
extent the Committee deems it to be necessary, the Committee shall meet
separately with the internal accounting staff and the independent
auditors, with or without management present, as well as the Company's
Chief Financial Officer and other management personnel, to discuss the
results of the Committee's examinations.
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3. The Committee shall:
- ensure that the independent auditors submit annually a formal written
statement delineating all relationships between the independent
auditors and the Company, consistent with Independence Standards Board
Standard No. 1, as such standard may be amended or supplemented from
time to time;
- discuss with the independent auditors any such relationships or
services provided by the independent auditors and their impact on the
objectivity and independence of the independent auditors; and
- recommend that the Board take appropriate action in response to the
independent auditors' report to satisfy the Board of the auditors'
independence.
4. The Committee shall review with management and the independent auditors
the financial statements to be included in the Company's Annual Report
on Form 10-K (or the Annual Report to Shareholders if distributed prior
to the filing of the Form 10-K), including the auditors' judgment about
the quality, not just acceptability, of the Company's accounting
principles, the consistency of the Company's accounting policies and
their application, and the clarity and completeness of the Company's
financial statements and related disclosures. The Committee also shall
discuss the results of the annual audit and any other matters required
to be communicated to the Committee by the independent auditors under
generally accepted auditing standards, including SAS No. 61, as such may
be amended or supplemented.
5. The Committee shall prepare the report required by the rules of the
Securities and Exchange Commission to be included in the Company's Proxy
Statement to be delivered to shareholders in connection with the
Company's annual meeting of shareholders.
With respect to the foregoing responsibilities and processes, the Committee
recognizes that the Company's financial management, including its internal audit
staff, as well as the independent auditors, have more time, knowledge, and more
detailed information regarding the Company than do Committee members.
Consequently, in discharging its oversight responsibilities, the Committee will
not provide or be deemed to provide any expertise or special assurance as to the
Company's financial statements or any professional certification as to the
independent auditors' work. While the Committee has the responsibilities and
powers set forth in this Charter, it is not the duty of the Committee to plan or
conduct audits or to determine that the Company's financial statements are
complete and accurate and are in accordance with generally accepted accounting
principles. This is the responsibility of management and the independent
auditors. Nor is it the duty of the Committee to conduct investigations, to
resolve disagreements, if any, between management and the independent auditors,
or to assure compliance with laws and regulations and the Company's internal
policies and procedures.
Dated: June 8, 2000
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USE ONLY FOR COMMON STOCK
CLAIRE'S STORES, INC.
ANNUAL MEETING OF SHAREHOLDERS -- JUNE 14, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, a shareholder of CLAIRE'S STORES, INC. (the "Company"),
hereby revoking any proxy heretofore given, does hereby appoint Messrs. Rowland
Schaefer and Harold E. Berritt, or either of them, proxies with power of
substitution, for and in the name of the undersigned to attend the Annual
Meeting of Shareholders of the Company to be held in the Wedgewood Room of the
Pierre Hotel, 2 East 61st Street, New York, New York, on June 14, 2001 at 9:30
a.m., New York City time, or at any adjournment or postponement thereof, and
there to vote, as designated below, all shares of Common Stock of said Company
which the undersigned would be entitled to vote if personally present at said
meeting, all as described in the Proxy Statement dated May 9, 2001, receipt of
which, together with the Annual Report to Shareholders is hereby acknowledged,
as follows:
1. Election of Directors by the holders of the Common Stock and the Class A
Common Stock, voting together as a single class.
[ ] FOR the nominees listed below: [ ] WITHHOLD AUTHORITY to vote for the
nominees listed below:
Rowland Schaefer Ira D. Kaplan Irwin L. Kellner, Ph.D. Steven H. Tishman Marla
L. Schaefer Bruce G. Miller E. Bonnie Schaefer
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
--------------------------------------------------------------------------------
(Continued and to be SIGNED on the OTHER SIDE)
2. In their discretion, said proxies are authorized to vote upon any other
business which may properly come before the Meeting.
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO CONTRARY INSTRUCTION IS
INDICATED, THE VOTE OF THE UNDERSIGNED WILL BE CAST "FOR" THE ELECTION OF
THE NOMINEES FOR DIRECTOR NAMED IN ITEM 1.
DATED: ---------------------, 2001
----------------------------------
SIGNATURE
----------------------------------
SIGNATURE IF HELD JOINTLY
NOTE: Your signature should appear
as your name appears hereon. When
shares are held by joint tenants,
both should sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give
full title as such. If a
corporation, please sign in full
corporate name by the President or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
THE BOARD OF DIRECTORS REQUESTS THAT YOU FILL IN, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
28
USE ONLY FOR CLASS A COMMON STOCK
CLAIRE'S STORES, INC.
ANNUAL MEETING OF SHAREHOLDERS -- JUNE 14, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, a shareholder of CLAIRE'S STORES, INC. (the "Company"),
hereby revoking any proxy heretofore given, does hereby appoint Messrs. Rowland
Schaefer and Harold E. Berritt, or either of them, proxies with power of
substitution, for and in the name of the undersigned to attend the Annual
Meeting of Shareholders of the Company to be held in the Wedgewood Room of the
Pierre Hotel, 2 East 61st Street, New York, New York, on June 14, 2001 at 9:30
a.m., New York City time, or at any adjournment or postponement thereof, and
there to vote, as designated below, all shares of Class A Common Stock of said
Company which the undersigned would be entitled to vote if personally present at
said meeting, all as described in the Proxy Statement dated May 9, 2001, receipt
of which, together with the Annual Report to Shareholders is hereby
acknowledged, as follows:
1. Election of Directors by the holders of the Common Stock and the Class A
Common Stock, voting together as a single class.
[ ] FOR the nominees listed below: [ ] WITHHOLD AUTHORITY to vote for the
nominees listed below:
Rowland Schaefer Ira D. Kaplan Irwin L. Kellner, Ph.D. Steven H. Tishman Marla
L. Schaefer Bruce G. Miller E. Bonnie Schaefer
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
--------------------------------------------------------------------------------
(Continued and to be SIGNED on the OTHER SIDE)
2. In their discretion, said proxies are authorized to vote upon any other
business which may properly come before the Meeting.
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO CONTRARY INSTRUCTION IS
INDICATED, THE VOTE OF THE UNDERSIGNED WILL BE CAST "FOR" THE ELECTION OF
THE NOMINEES FOR DIRECTOR NAMED IN ITEM 1.
DATED: ---------------------, 2001
----------------------------------
SIGNATURE
----------------------------------
SIGNATURE IF HELD JOINTLY
NOTE: Your signature should appear
as your name appears hereon. When
shares are held by joint tenants,
both should sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give
full title as such. If a
corporation, please sign in full
corporate name by the President or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
THE BOARD OF DIRECTORS REQUESTS THAT YOU FILL IN, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.