LOGO
 
 
                         NOTICE OF 1998 ANNUAL MEETING
                              AND PROXY STATEMENT
 
 
 

 
 
 
                                                                 April 13, 1998
 
Dear Shareholder:
 
  The annual meeting of Lands' End, Inc. shareholders will be held at our
headquarters in Dodgeville, Wisconsin, on Wednesday, May 13, 1998, beginning
at 10:00 a.m. C.D.T. (See map for directions.)
 
  The directors and officers of your company join me in extending you a
cordial invitation to attend.
 
  For those of you interested in seeing, firsthand, how we fill an order,
tours of our facilities will be available before the meeting. The first tour
will leave the activity center at 8:00 a.m. and the last one will leave
promptly at 9:00 a.m.
 
  The agenda for the meeting includes the election of three directors and the
ratification of the appointment of independent public accountants. There also
will be a brief management presentation on the state of the business.
 
  I hope you can be there, but whether you attend the meeting in person or
not, it's important that your shares be represented. To make sure they are,
please mark your votes on the enclosed proxy card and sign, date and mail it
in the postage-paid envelope. It will help us keep postage costs down if you
take a minute to do so now.
 
                                     LOGO
                                     Gary C. Comer
                                     Chairman

 
 
                                     LOGO
 
                   NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                            TO BE HELD MAY 13, 1998
 
To Our Shareholders:
 
  The annual meeting of shareholders of Lands' End, Inc. (the "Company") will
be held at the offices of the Company, One Lands' End Lane, Dodgeville,
Wisconsin 53595, on May 13, 1998, at 10:00 a.m. C.D.T. for the following
purposes:
 
  1. To elect three members to the Board of Directors of the Company to serve
     until the annual meeting of shareholders in 2001, and until their
     successors are duly elected and qualified.
 
  2. To ratify the appointment of Arthur Andersen LLP as independent public
     accountants for the Company for the fiscal year ending January 29, 1999.
 
  3. To consider and act upon such other business as may properly come before
     the meeting or any adjournment thereof.
 
  The Board of Directors has fixed the close of business on March 20, 1998, as
the record date for the meeting. All shareholders of record on that date are
entitled to notice of and to vote at the meeting.
 
  Please complete and return the enclosed proxy in the envelope provided
whether or not you intend to be present at the meeting in person.
 
                                          By order of the Board of Directors,
 
                                          LOGO
                                          Robert S. Osborne
                                          Secretary
 
Dodgeville, Wisconsin
April 13, 1998
 
  YOUR VOTE IS IMPORTANT. PLEASE PROMPTLY MARK, DATE, SIGN AND RETURN YOUR
PROXY IN THE ENCLOSED ENVELOPE.

 
                                PROXY STATEMENT
 
INTRODUCTION
 
  This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Lands' End, Inc., a Delaware corporation (the
"Company"), of proxies to be voted at the 1998 annual meeting of shareholders
on Wednesday, May 13, 1998, and at any adjournment thereof (the "Annual
Meeting"). This Proxy Statement and the accompanying proxy card are being
mailed to shareholders on or about April 13, 1998.
 
PROXIES
 
  Properly signed and dated proxies received by the Company's Secretary prior
to or at the Annual Meeting will be voted as instructed thereon or, in the
absence of such instructions, (a) FOR election to the Board of Directors of
the persons nominated by the Board, (b) FOR the ratification of the
appointment of Arthur Andersen LLP as independent public accountants for the
Company and (c) in accordance with the best judgment of the persons named in
the proxy on any other matters which may properly come before the meeting. Any
proxy may be revoked for any reason prior to voting by notifying the Secretary
of the Company in writing of such revocation or by voting by ballot at the
meeting, which will cancel any proxies previously submitted. The Company has
appointed an officer of Firstar Trust Company, transfer agent for the Company,
to act as an independent inspector at the Annual Meeting.
 
VOTING OF PROXIES AND SHARES OUTSTANDING
 
  Holders of record at the close of business on March 20, 1998, of shares of
the Company's common stock, $.01 par value per share (the "Common Stock"), are
entitled to vote on all matters which may be properly presented at the Annual
Meeting. The number of shares of Common Stock of the Company outstanding on
March 20, 1998, the record date for the meeting, was 30,961,250 all of one
class and each entitled to one vote, owned by 2,427 shareholders of record.
 
  The holders of at least a majority of the shares of Common Stock must be
present in person or by proxy at the Annual Meeting in order for the Annual
Meeting to be held. Directors will be elected by a plurality of the votes cast
for the election of directors. The affirmative vote of the holders of a
majority of the shares of Common Stock present and entitled to vote at the
Annual Meeting is required for approval of each of the other actions proposed
to be taken at the Annual Meeting. On each such proposed action, pursuant to
Delaware law, abstentions are treated as present and entitled to vote and thus
have the effect of a vote against a proposed action. A broker non-vote (where
a broker submits a proxy but does not have authority to vote a customer's
shares on one or more matters) on a proposed action is considered not entitled
to vote on that action and thus is not counted in determining whether an
action requiring approval of a majority of the shares present and entitled to
vote at the Annual Meeting has been approved.
 
                             ELECTION OF DIRECTORS
 
  The Board of Directors is composed of eight directors. The directors are
divided into three classes, two of which are composed of three directors each,
and one of which is comprised of two directors. One class is elected each year
for a three year term. The three nominees for election as directors to serve
until the annual meeting of shareholders in 2001, and until their respective
successors are duly elected and qualified, are John N. Latter, Daniel Okrent
and Michael J. Smith. The Board of Directors recommends that shareholders vote
"FOR" the election of Messrs. Latter, Okrent and Smith.

 
  The following tabulation sets forth, as of March 20, 1998, certain
information about each nominee for election to the Company's Board of
Directors and each continuing director.
 
                DIRECTOR NOMINEES FOR A TERM TO EXPIRE IN 2001
 
JOHN N. LATTER                                                          AGE: 72
 
  Director of the Company since 1978. Since 1980, Mr. Latter has been
  independently employed as a financial consultant.
 
DANIEL OKRENT                                                           AGE: 50
 
  Director of the Company since October 1997, Mr. Okrent has been editor of
  new media for Time, Inc., New York, since December 1996, after serving four
  years as managing editor of Life. Prior to 1991, he was editor at Alfred A.
  Knopf, Inc. and Viking Press and editor-in-chief at Harcourt Brace
  Jovanovich.
 
MICHAEL J. SMITH                                                        AGE: 37
 
  President and Chief Executive Officer of the Company since December 1994.
  In 1983, Mr. Smith entered the employ of the Company as a Market Research
  Analyst. In 1985, he became Circulation Manager of Planning and in 1988, he
  was promoted to Manager of Merchandise Planning and Research. In 1990, Mr.
  Smith was named Managing Director of Coming Home and in 1991, he was
  elected Vice President of that business. Mr. Smith has been serving as a
  director of the Company since his appointment to his current positions in
  December 1994.
 
                     DIRECTORS WHOSE TERM EXPIRES IN 1999
 
GARY C. COMER                                                           AGE: 70
 
  Founder of the Company and Chairman of the Board of Directors. Mr. Comer
  was President of the Company from 1963 until 1989, and served as Chief
  Executive Officer from 1963 until 1990. He has been a director of the
  Company since 1963. Prior to 1963, Mr. Comer was employed for ten years as
  a copywriter at Young & Rubicam.
 
DAVID B. HELLER                                                         AGE: 67
 
  Director of the Company since 1986. Since 1974, Mr. Heller has been
  President of Advisory Research, Inc., an investment advisory firm. Mr.
  Heller is also a director of Ambassador Apartments, Inc., a real estate
  investment trust.
 
                     DIRECTORS WHOSE TERM EXPIRES IN 2000
 
RICHARD C. ANDERSON                                                     AGE: 68
 
  Vice Chairman of the Company since 1984. Mr. Anderson served as Chief
  Executive Officer of the Company from 1990 through January 1993. In
  addition, Mr. Anderson served as President and Chief Operating Officer from
  1989 until 1992. He has been a director of the Company since 1979. From
  1977 to 1984, Mr. Anderson was a senior executive of Needham, Harper &
  Steers, serving as Executive Vice President in charge of programming and
  media from 1981 until 1984. Mr. Anderson provides certain services to the
  Company and is compensated for such services. See "Meetings and
  Compensation of Directors; Committees of the Board."
 
                                       2

 
WILLIAM E. FERRY                                                        AGE: 57
 
  Vice Chairman of Sales since rejoining the Company in July 1996. Mr. Ferry
  served as Executive Vice President, Merchandising, with the Company between
  1981 and 1986. Mr. Ferry was the President and Chief Executive Officer for
  Eastern Mountain Sports from 1986 until 1996. Mr. Ferry has been serving as
  a director of the Company since November 1996.
 
HOWARD G. KRANE                                                         AGE: 64
 
  Director of the Company since 1986. Mr. Krane's professional corporation is
  a partner of Kirkland & Ellis, with which he has practiced law since 1957.
  Kirkland & Ellis renders legal services to the Company. Mr. Krane is also
  Chairman of the Board of Trustees of the University of Chicago.
 
                    MEETINGS AND COMPENSATION OF DIRECTORS
 
  The Board of Directors held eight formal meetings during the fiscal year
ended January 30, 1998. All directors attended at least 75% of the total
number of meetings of the Board and Committees of which they were members.
Until May 1997, Directors who were not salaried officers or employees of the
Company were eligible to receive an annual retainer of $25,000 in cash of
which they could irrevocably elect to defer receipt during which time the
deferred amount would be adjusted to reflect the performance of the Company's
Common Stock. The Company's Non-Employee Director Stock Option Plan (the
"DSOP"),which was adopted by the Board of Directors on February 18, 1997 and
approved by the shareholders on May 14, 1997, replaced the annual retainer. In
addition, the reasonable expenses incurred by each director in connection with
his duties as a director are reimbursed by the Company. Directors who are
salaried officers or employees of the Company earn no additional compensation
for their services as directors.
 
  The DSOP is intended to further the growth and development of the Company by
encouraging non-employee directors of the Company to expand their ownership
interests in the Company by purchasing its Common Stock. It is intended that
the DSOP will provide such persons with an added incentive to continue to
serve as directors and will stimulate their efforts in promoting the growth,
efficiency and profitability of the Company, thereby more closely aligning
their interests with those of the stockholders generally. There is an
aggregate of 400,000 shares of the Company's Common Stock available for
issuance upon exercise of options granted under the DSOP, which shares may be
authorized and unissued shares or treasury shares. Options are granted under
the DSOP with an exercise price equal to the fair market value per share of
the Company's Common Stock on the date of the grant. The DSOP is a "formula
plan" which specifies when and in what amounts options are to be granted to
eligible directors. All non-employee directors other than Gary C. Comer, who
has waived participation in the DSOP, participate in the DSOP.
 
  In addition to providing for initial option grants to the non-employee
directors in office at the time the DSOP was approved by the stockholders and
interim grants to new non-employee directors, the DSOP provides for annual
grants of 5,000 shares to each eligible director (other than directors who
received the initial option, who are not eligible for the annual option until
the annual meeting of the stockholders in 2000). In fiscal year 1998, Messrs.
Anderson, Heller, Krane and Latter each received an initial grant of 20,000
shares at a price of $28.625. Mr. Okrent received an interim grant of 2,917
shares at a price of $30.938 upon his appointment to the Board of Directors in
October 1997.
 
  In addition to stock options under the DSOP described above, Mr. Anderson
received total compensation of $84,900 from the Company in consideration for
his providing creative and merchandising consulting services to the Company
during fiscal year 1998. The Company paid $1,372 of Lands' End, Inc. Health
Care plan premiums for each of Mr. Anderson and Mr. Comer in fiscal year 1998.
Mr. Anderson received $1,442 and Mr. Comer received $339 representing personal
use of Company planes. Mr. Okrent received $6,248 representing $3,067 of
product and the tax gross up of $3,181.
 
                                       3

 
                            COMMITTEES OF THE BOARD
 
  The Board has three standing committees: The Audit Committee, the
Compensation Committee and the Performance Compensation Committee. The Board
does not have a nominating committee. The functions of the standing committees
are described briefly below:
 
AUDIT COMMITTEE
 
  The members of the Audit Committee are John N. Latter (chairman) and David
B. Heller. The functions of the Audit Committee are to recommend the
appointment of the Company's independent public accountants, to review and
approve the scope of the yearly audit and proposed budget for audit fees, to
review the results of the annual audit, to review the Company's internal
controls and the functions of the Company's internal audit staff, and to
report to the Board of Directors on the activities and findings of the Audit
Committee and make recommendations to the Board of Directors based on such
findings. The Company's internal audit staff and independent public
accountants have direct access to the Audit Committee to discuss auditing and
any other accounting matters. The Audit Committee held two formal meetings
during fiscal year 1998.
 
COMPENSATION COMMITTEE
 
  The members of the Compensation Committee are Howard G. Krane (chairman),
Gary C. Comer, David B. Heller and John N. Latter. The Compensation Committee
monitors the Company's overall compensation policies and specifically reviews
and approves all compensation to be paid to the Company's Chief Executive
Officer, to the four other most highly compensated executive officers (the
"Named Executive Officers") and to any other officer whose annual compensation
is $300,000 or more (except to the extent that such responsibility is
specifically vested in the Performance Compensation Committee). The
Compensation Committee administers the Long-Term Incentive Plan and
establishes the terms of any benefits granted thereunder. The Compensation
Committee held three formal meetings during fiscal year 1998.
 
  Except for the Non-Employee Director Stock Option Plan, none of the members
of the Compensation Committee is or has been, for a period of at least one
year prior to appointment, eligible to receive a benefit under any plans of
the Company entitling participants to acquire Common Stock, stock options or
stock appreciation rights.
 
PERFORMANCE COMPENSATION COMMITTEE
 
  The members of the Performance Compensation Committee are David B. Heller
(chairman) and John N. Latter. The Performance Compensation Committee
administers the Stock Option Plan and establishes the terms of any benefits
granted thereunder. The Performance Compensation Committee also administers
the Company's non-stock based compensation plans which are intended to provide
"performance-based compensation" (as defined in Section 162(m) of the Internal
Revenue Code of 1986, as amended) including, but not limited to, establishing
objective performance goals and measures and certifying that such performance
goals and other material terms are satisfied. The Performance Compensation
Committee is comprised solely of directors who are not (i) current employees
of the Company (or any related entity), (ii) former employees of the Company
(or any related entity) receiving compensation for prior services (other than
certain pension benefits), (iii) former officers of the Company (or any
related entity), or (iv) consultants or individuals who are otherwise
receiving compensation for personal services in any capacity other than as a
director. The Performance Compensation Committee held one formal meeting
during fiscal year 1998.
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
  Gary C. Comer, who currently serves on the Compensation Committee, is the
Company's founder and Chairman of the Board of Directors. Mr. Comer was
President of the Company from 1963 until 1989, and served as Chief Executive
Officer from 1963 until 1990. Mr. Comer is retired from active employment at
the Company.
 
                                       4

 
                            EXECUTIVE COMPENSATION
 
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
 
 Compensation of Executive Officers Generally
 
  Lands' End believes that its employees are its most valuable asset. The
Company's goal is to recruit, motivate, reward and retain the best hourly and
salaried work force in the direct marketing industry. In addition, the Board
and the Compensation Committee desire to appropriately recognize and reward
the performance of, and to provide further incentives to, key individuals who
contribute to the Company's financial performance. The Company has developed
and implemented its compensation policies and practices, including those for
executive officers, with those goals in mind.
 
  The Compensation Committee believes that Lands' End has derived significant
benefits over the years from the fact that its founder and senior executive
officers have had substantial amounts of stock ownership in the Company.
Accordingly, one of the principal compensation practices used to recruit,
motivate and retain the Company's most senior executive officers has been the
use of stock option awards. Additional compensation for senior executives and
other management personnel is provided through base salaries and annual and
long-term incentive plans based on specific financial performance goals. In
1996, the Board adopted new annual and long-term incentive plans with
performance goals based on the Company's annual pre-tax margin, each business
unit's annual pre-tax margin and the Company's three year average return on
invested capital and pre-tax margin. Those plans are described below.
 
  In 1994, the Compensation Committee engaged a nationally recognized
compensation consulting firm to assist in developing an overall perspective on
base, incentive and long-term compensation and benefit practices in the
specialty retail business. Since that time, representatives of the consulting
firm have met formally with the Compensation Committee (sometimes with other
Board members in attendance) on a regular basis and have had numerous other
informal discussions with members of the Compensation Committee and the Board.
 
  The Compensation Committee believes that it is desirable for the Company to
maintain a competitive package of base, incentive and long-term compensation.
Accordingly, the Committee from time to time considers data provided by its
compensation consultant regarding compensation paid to executives of other
companies deemed to be comparable to the Company in certain respects. The
comparison group varies from time to time based on the specific nature of the
comparison but generally is comprised of companies that tend to have national
and international business operations and similar sales volumes, market
capitalizations, employment levels and lines of business. The companies used
for comparison in compensation matters generally are not the same companies
which comprise the published industry index in the Performance Graph included
in this Proxy Statement. The Compensation Committee believes that the
Company's most direct competitors for executive talent are not necessarily all
of the companies that would be included in the published industry index
established for comparing shareholder returns.
 
  Although the Compensation Committee uses comparison group survey data in
developing the Company's overall compensation perspective, it also considers
other subjective factors that affect the comparability and usefulness of such
data to the Company. These factors include the Company's leading position as a
direct merchant, the evolving nature of its business as the Company continues
to invest in developing new catalog formats and expanding internationally, and
elements of its corporate culture.
 
 Components of Fiscal Year 1998 Compensation
 
  Base Salary. In determining and reviewing base salary levels, the
Compensation Committee considers the size and responsibility of the
individual's position, the individual's overall performance, the base salaries
paid by competitors for comparable positions and, in the case of new hires,
the amount of the individual's prior compensation and the need to induce the
individual to enter the employ of the Company. In making salary decisions with
respect to senior executives and overseeing other salary decisions made by
management, the
 
                                       5

 
Committee exercises its discretion and judgment based on the foregoing
factors, without applying a specific formula to determine the weight of each
factor considered.
 
  Annual Incentive Plan. The Annual Incentive Plan (bonus) provides for
participation by most of the Company's salaried employees (currently
approximately 790 individuals). Pursuant to this plan, each participant is
granted an annual incentive award on or about the beginning of each fiscal
year. Each annual incentive award consists of the right to be eligible to
receive a cash bonus partially paid during the applicable fiscal year and the
remainder paid after the completion of one full fiscal year from the date of
grant. In December, participants receive a partial payment under annual
incentive awards granted with respect to such period, and, if they are
employed at the end of the one year performance period, participants receive
the remaining payment in March.
 
  Other than participants employed by international subsidiaries of the
Company, each participant's bonus eligibility amount is 10% of base salary,
provided that the Compensation Committee has the right to approve higher
levels for certain participants on an individual basis. Participants earn a
bonus equal to their bonus eligibility amount multiplied by a factor of 0% to
200%, depending on financial results measured by a matrix of (i) the Company's
annual pre-tax margin and (ii) the participant's business unit annual pre-tax
margin. The matrix is subject to adjustment from time to time at the
discretion of the Compensation Committee. For most of the Company's salaried
employees, the bonus eligibility amounts are 10% of base salary. For the
Company's Named Executive Officers other than the Chief Executive Officer and
Mr. Ferry, the bonus eligibility amounts are 60% of base salary. Mr. Ferry was
given a commitment, when he was hired by the Company as Vice Chairman, Sales,
in July 1996, that his payment under the Annual Incentive Plan with respect to
his first year of participation would be at least $250,000. During his second
year of participation, Mr. Ferry's bonus eligibility amount will be 100% of
base salary. The bonus eligibility amount for the Chief Executive Officer is
100% of base salary.
 
  In addition, for fiscal year 1998, the Compensation Committee authorized
management to provide special incentives to the Company's core merchandise
leaders, speciality business unit leaders, international business unit leaders
and direct marketing leaders (approximately 18 individuals). Pursuant to this
program, participants were eligible to receive cash bonuses equal to 2% to 4%
of the excess of the participant's business unit pretax earnings over a
threshold applicable to that business unit. A similar program is being
considered for fiscal 1999.
 
  Long-Term Incentive Plan. The Long-Term Incentive Plan provides for
participation by certain of the Company's managers (currently approximately 56
individuals). Pursuant to this plan, each participant is granted a long-term
incentive award on or about the beginning of each fiscal year. Each long-term
incentive award consists of the right to be eligible to receive a cash bonus
after the completion of three full fiscal years from the date of grant.
Participants must be employed by the Company at the completion of the three
year performance period in order to receive any payments under long-term
incentive awards granted with respect to such period (except in cases where a
participant's employment terminates due to retirement, disability or death).
 
  The cash bonus eligibility amounts range from 10% to 30% of base salary for
individual participants. For most participants in the plan, the bonus
eligibility amounts are 10% of base salary. The Company's most senior
executives, including the Named Executive Officers, do not participate in the
Long-Term Incentive Plan. Participants earn a bonus equal to their bonus
eligibility amount, multiplied by a factor of 0% to 200%, depending on overall
corporate results measured by a matrix of (i) the Company's three year average
pre-tax margin and (ii) the Company's three year average return on invested
capital. The matrix is subject to adjustment from time to time at the
discretion of the Compensation Committee.
 
  Stock Awards and Options. As noted in the last two years' Compensation
Committee reports, the Committee generally expects that participation in the
Long-Term Incentive Plan adopted in fiscal 1996 will lead to a reduction in
the number of employees to whom options are granted under the Company's Stock
Option Plan. Consistent with that view, the Company awarded stock option
grants to a limited number of employees in fiscal year 1998.
 
                                       6

 
  The Company awarded a total of 265,000 stock option grants in fiscal year
1998 under the Company's Stock Option Plan. In November 1997, the Company
awarded a total of 265,000 stock option grants, including a grant of 70,000
options to Michael Smith, 15,000 options to Francis Schaecher and a total of
180,000 options to eleven other employees, none of whom is a Named Executive
Officer.
 
 Chief Executive Officer Compensation
 
  The Chief Executive Officer of the Company is Michael Smith. In May 1997, in
connection with the review of salary levels of certain senior officers and in
light of Mr. Smith's performance as Chief Executive Officer, the Compensation
Committee increased Mr. Smith's base salary from $425,0000 to $500,000 per
year. Mr. Smith's bonus eligibility amount continues to be 100% of base salary
for purposes of the Annual Incentive Plan described above.
 
  In November 1997, the Performance Compensation Committee awarded Mr. Smith
options to purchase 70,000 shares of the Company's Common Stock at $34.9375
per share (the closing market price per share of the Common Stock on the date
of grant). The options are exercisable for ten years and vest at the rate of
10% in year one, 15% in year two, 20% in year three, 25% in year four and 30%
in year five. The specific number of options awarded was based on the
recommendation of a representative of the Company's compensation consulting
firm and on subjective judgment factors, including the overall compensation
policies and practices described above, the then current level of Mr. Smith's
beneficial ownership of stock in the Company and the number of stock options
held by other officers of the Company.
 
 Tax Matters
 
  The Compensation Committee and the Board have considered the provisions of
Section 162(m) of the Internal Revenue Code, which impose an annual limit of
$1 million on the deductibility of compensation payments to a company's chief
executive officer and the four other most highly compensated executive
officers for whom proxy statement disclosure is required and who are employed
at the end of such company's taxable year. "Performance-based compensation"
(as defined in the Code) is excluded from this limit. It is the Company's
intention to preserve the deductibility of compensation paid to its employees,
including gains realized upon the exercise of non-qualified stock options, to
the extent feasible and consistent with the Company's overall compensation
philosophy. Accordingly, the Performance Compensation Committee administers
the Company's Stock Option Plan and all other plans which are intended to
provide "performance-based compensation" as defined in Section 162(m) of the
Internal Revenue Code. This Committee consists of Mr. Heller, as chairman, and
Mr. Latter, each of whom is believed to meet certain director eligibility
requirements specified in Section 162(m).
 
  Notwithstanding the foregoing, the Compensation Committee believes that the
Company's compensation philosophy is appropriate and consistent with the long-
term interests of the Company, without regard to tax considerations. In the
event of changes in the tax law or other circumstances that might affect tax
treatment, the Compensation Committee would not currently anticipate that
fundamental changes would be made in the Company's overall compensation
policies and practices.
 
                                          Submitted by the Compensation
                                           Committee
                                          of the Board of Directors
 
                                          Howard G. Krane, Chairman
                                          Gary C. Comer
                                          David B. Heller
                                          John N. Latter
 
                                       7

 
SUMMARY COMPENSATION TABLE
 
  Set forth below is certain information concerning the compensation for each
of the Named Executive Officers for the fiscal year ended January 30, 1998:
 
LONG TERM COMPENSATION ------------------ ANNUAL COMPENSATION AWARDS ----------------------------------- ------------------ RESTRICTED OTHER ANNUAL STOCK STOCK ALL OTHER NAME AND PRINCIPAL FISCAL SALARY BONUS COMPENSATION AWARDS OPTIONS COMPENSATION POSITION YEAR ($) ($) ($) ($)(1) (#) ($)(2) - ------------------ ------ ------- ------- ------------ ---------- ------- ------------ Michael J. Smith........ 1998 481,250 493,281 -0- -0- 70,000 63,277(3) President and 1997 350,481 315,433 -0- -0- 50,000 40,134 Chief Executive Officer 1996 305,769 6,000 135,000(4) -0- 110,000 20,625 William E. Ferry(5)..... 1998 437,500 448,438 -0- -0- -0- 188,859(6) Vice Chairman, Sales 1997 207,692 250,000 -0- 493,750 250,000 31,030 Stephen A. Orum......... 1998 265,000 162,975 -0- -0- -0- 32,767 Executive Vice President, 1997 250,000 135,000 -0- -0- 25,000 24,853 Chief Operating Officer 1996 254,807 5,000 -0- -0- 60,000 14,820 Bradley K. Johnson(7)... 1998 287,500 176,812 -0- -0- -0- 13,583 Senior Vice President, 1997 177,885 96,058 -0- -0- 60,000 54,623 Chief Administrative Officer & Chief Financial Officer Francis P. Schaecher.... 1998 217,500 133,762 -0- -0- 15,000 25,527 Senior Vice President, 1997 193,250 104,355 -0- -0- 12,000 18,126 Operations 1996 191,615 3,760 -0- -0- 30,000 11,301
- -------- (1) Dividends, if any, on shares of restricted stock are paid at the same time and at the same rate as dividends on the Company's unrestricted Common Stock. The aggregate number and value (based on the closing price of the Company's Common Stock ($39.3125) on the New York Stock Exchange on January 30, 1998) of each Named Executive Officer's restricted stock holdings as of such date are as follows: Mr. Smith, 1,400 shares, $55,038; Mr. Ferry, 20,000 shares, $786,250; Mr. Orum, 2,000 shares, $78,625; Mr. Johnson, 0 shares, $0; Mr. Schaecher, 0 shares, $0. (2) For fiscal year 1998, these amounts represent the taxable portion of premiums on Company-provided life insurance, Company's contributions to the Retirement Plan and the Company's contributions to the Deferred Compensation and Excess Benefit Plan, in the following amounts: Mr. Smith, $807, $11,441, $50,668, respectively, Mr. Ferry, $5,504, $11,383, $26,214, respectively, Mr. Orum, $3,522, $11,383, $17,862, respectively; Mr. Johnson $1,248, $12,335, $0, respectively; and Mr. Schaecher, $1,793, $11,444, $12,290, respectively. (3) Of the $63,277 in 1998, $361 is for personal use of Company planes and the remainder is described in footnote (2) above. (4) In fiscal year 1996, Mr. Smith received a cash payment of $135,000 from the Company pursuant to the terms of his appointment as President and Chief Executive Officer of the Company, effective December 2, 1994. (5) Mr. Ferry was appointed Vice Chairman, Sales on July 25, 1996. (6) Of the $188,859 in 1998, $3,669 is for personal use of Company planes, $142,089 is for relocation expenses and the remainder is described in footnote (2) above. (7) Mr. Johnson was appointed Senior Vice President, Chief Administrative Officer and Chief Financial Officer on May 20, 1996. 8 STOCK OPTION GRANTS IN FISCAL YEAR 1998 Set forth below is certain information relating to options to acquire Common Stock granted to each Named Executive Officer during the fiscal year ended January 30, 1998, and the grant-date present value of each option grant.
POTENTIAL REALIZABLE PERCENT OF VALUE AT ASSUMED ANNUAL TOTAL STOCK RATES OF STOCK PRICE STOCK OPTIONS APPRECIATION OPTIONS GRANTED TO EXERCISE FOR OPTION TERM GRANTED EMPLOYEES IN PRICE EXP. ----------------------- NAME (#) (1) FISCAL YEAR ($/SH) DATE 5%($)(2) 10%($)(2) ---- ------- ------------ -------- -------- ----------- ------------ Michael J. Smith........ 70,000 26.42% $34.9375 12/31/07 1,538,075 3,897,775 Francis P. Schaecher.... 15,000 5.66% 34.9375 12/31/07 329,588 835,238
- -------- (1) Options are exercisable starting on the first anniversary of the grant date, with 10% of the shares covered thereby becoming exercisable at that time, and an additional 15%, 20%, 25%, and 30% of the option shares becoming exercisable on the second, third, fourth, and fifth anniversaries of the grant date, respectively. (2) The actual value, if any, an executive may realize will depend upon the excess of the stock price over the exercise price on the date the option is exercised, so there is no assurance that the value realized by the executive will be at or near the amount shown. In order to realize the potential value set forth in the 5% and 10% columns, the per share price of the Common Stock would be approximately $56.91 and $90.62. STOCK OPTION EXERCISES AND FISCAL YEAR-END VALUE TABLE Set forth below is certain information relating to options to acquire Common Stock exercised by each Named Executive Officer during the fiscal year ended January 30, 1998, and options to acquire Common Stock held by each Named Executive Officer as of such date.
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED STOCK UNEXERCISED IN-THE- OPTIONS AT MONEY STOCK OPTIONS SHARES VALUE FY-END (#) AT FY-END ($) ACQUIRED ON REALIZED EXERCISABLE/ EXERCISABLE/ NAME EXERCISE (#) ($) (1) UNEXERCISABLE UNEXERCISABLE (2) ---- ------------ -------- ----------------- ------------------- Michael J. Smith........ -0- -0- 46,740/202,060 1,083,736/3,325,489 William E. Ferry........ -0- -0- 25,000/225,000 489,063/4,401,563 Stephen A. Orum......... -0- -0- 68,380/ 75,220 1,659,054/1,705,271 Bradley K. Johnson...... -0- -0- 6,000/ 54,000 117,375/1,056,375 Francis P. Schaecher.... -0- -0- 15,580/ 50,020 324,679/ 843,709
- -------- (1) Upon exercise of an option, an individual does not receive cash equal to the amount contained in the Value Realized column of this table. Instead, the amounts contained in the Value Realized column reflect the increase in the price of the Company's Common Stock from the option award date to the option exercise date. No cash is realized until the shares received upon exercise of an option are sold. (2) Calculated based upon the closing price of the Company's Common Stock ($39.3125) on the New York Stock Exchange on January 30, 1998. 9 PERFORMANCE GRAPH The following graph presents the cumulative total shareholder return of the Company, the Value Line Retail Index and the Standard & Poor's MidCap 400 Index for a five year period. Cumulative total shareholder return is defined as share price appreciation assuming reinvestment of dividends. The Company's Common Stock is included in both the Value Line Retail Index and the Standard & Poor's MidCap 400 Index. In addition to the Company, 52 retailers (including catalog companies) comprise the Value Line Retail Index. The dollar amounts shown on the following graph assume that $100 was invested on February 1, 1993 in Company Common Stock, stocks constituting the Value Line Retail Index and stocks constituting the Standard and Poor's MidCap 400 Index with all dividends being reinvested. The January 31 dates shown on the following graph do not correspond exactly with the last day of the Company's fiscal year in calendar years 1994, 1995, 1996 and 1998. COMPARISON OF FIVE-YEAR TOTAL RETURN AMONG LANDS' END, INC., VALUE LINE RETAIL INDEX AND S&P MIDCAP 400 INDEX LOGO
VALUE OF $100 INVESTED ON FEBRUARY 1, 1993 AT --------------------------------------- 1/31/94 1/31/95 1/31/96 1/31/97 1/31/98 ------- ------- ------- ------- ------- Lands' End, Inc......................... $187 $124 $112 $218 $302 Value Line Retail Index................. 107 92 94 116 162 S&P MidCap 400 Index.................... 115 110 144 176 219
10 PRINCIPAL SHAREHOLDERS The following table shows certain information concerning the number of shares of the Company's Common Stock beneficially owned, directly or indirectly, by each director and nominee for director of the Company, the chief executive officer and each of the four other most highly compensated executive officers of the Company, and the directors and executive officers as a group. The following table also sets forth information concerning each person known to the Company as of March 20, 1998, to be the "beneficial owner" (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of more than 5% of the Company's Common Stock. Unless otherwise indicated, the persons named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them. Except as described in the notes below, all information in the table and the accompanying footnotes is given as of March 20, 1998, and has been supplied by each of the persons included in the table.
PERCENT OF BENEFICIAL OWNERS AMOUNT CLASS ----------------- ---------- ------- Gary C. Comer (1).................................... 17,149,392 55.39% Address: Citicorp Plaza, Suite 875; 8420 W. Bryn Mawr Avenue; Chicago, IL 60631 Richard C. Anderson (2).............................. 1,199,010 3.87% David B. Heller (3).................................. 23,000 * Howard G. Krane (4).................................. 35,000 * John N. Latter (5)................................... 150,000 * Daniel Okrent (6).................................... 3,917 * William E. Ferry (7)................................. 154,130 * Bradley K. Johnson (8)............................... 6,000 * Stephen A. Orum (9).................................. 94,130 * Francis P. Schaecher (10)............................ 93,380 * Michael J. Smith (11)................................ 84,910 * All directors and executive officers as a group (11 persons) (12)................................... 18,992,869 60.78%
- -------- (1) Share amount shown includes 1,000,000 shares of the Company's Common Stock owned by Mr. Comer gifted to his children as to which he disclaims beneficial ownership. (2) Share amount shown includes (i) exercisable options for 10,000 shares of Company Common Stock granted to Mr. Anderson on May 14, 1997 under the Non-Employee Director Stock Option Plan, (ii) options for 5,000 shares of Company Common Stock granted to Mr. Anderson on May 14, 1997 under the Non-Employee Director Stock Option Plan which options will become exercisable within 60 days, (iii) 89,382 shares of the Company's Common Stock owned by Mr. Anderson's wife as to which he disclaims beneficial ownership and (iv) 37,818 shares of the Company's Common Stock which Mr. Anderson gifted to his son as to which he disclaims beneficial ownership. (3) Share amount shown includes (i) exercisable options for 10,000 shares of Company Common Stock granted to Mr. Heller on May 14, 1997 under the Non- Employee Director Stock Option Plan and (ii) options for 5,000 shares of Company Common Stock granted to Mr. Heller on May 14, 1997 under the Non- Employee Director Stock Option Plan which options will become exercisable within 60 days. (4) Share amount shown includes (i) exercisable options for 10,000 shares of Company Common Stock granted to Mr. Krane on May 14, 1997 under the Non- Employee Director Stock Option Plan, (ii) options for 5,000 shares of Company Common Stock granted to Mr. Krane on May 14, 1997 under the Non- Employee Director Stock Option Plan which options will become exercisable within 60 days and (iii) 2,000 shares of the Company's Common Stock owned by Mr. Krane's wife as to which he disclaims beneficial ownership. (5) Share amount shown includes (i) exercisable options for 10,000 shares of Company Common Stock granted to Mr. Latter on May 14, 1997 under the Non- Employee Director Stock Option Plan and (ii) options for 5,000 shares of Company Common Stock granted to Mr. Latter on May 14, 1997 under the Non- Employee Director Stock Option Plan which options will become exercisable within 60 days. (6) Share amount shown includes exercisable options for 2,917 shares of Company Common Stock granted to Mr. Okrent on October 7, 1997 under the Non-Employee Director Stock Option Plan. (7) Share amount shown includes (i) exercisable options for 25,000 shares of Company Common Stock granted to Mr. Ferry on July 25, 1996 under the Stock Option Plan, (ii) 12,610 shares of the Company's Common Stock owned by Mr. Ferry and his wife as tenants in common as to which he disclaims beneficial ownership except to the extent of his pecuniary interest therein, (iii) 61,520 shares of the 11 Company's Common Stock owned by Mr. Ferry's family's limited partnership, Ferry Lands' End Limited Partnership, as to which he disclaims beneficial ownership except to the extent of his pecuniary interest therein and (iv) 20,000 shares of the Company's Common Stock owned by Mr. Ferry's family's limited partnership, Ferry Lands' End II Limited Partnership, as to which he disclaims beneficial ownership except to the extent of his pecuniary interest therein. (8) Share amount shown includes exercisable options for 6,000 shares of Company Common Stock granted to Mr. Johnson on July 25, 1996 under the Stock Option Plan. (9) Share amount shown includes (i) exercisable options for 84,130 shares of Company Common Stock granted to Mr. Orum on December 9, 1991, April 6, 1993, December 10, 1993, February 13, 1995 and March 15, 1996 under the Stock Option Plan and (ii) options for 6,000 shares of Company Common Stock granted to Mr. Orum on April 6, 1993 under the Stock Option Plan, which options will become exercisable within 60 days. (10) Share amount shown includes exercisable options for 23,380 shares of Company Common Stock granted to Mr. Schaecher on December 10, 1993, February 13, 1995 and March 15, 1996 under the Stock Option Plan. (11) Share amount shown includes (i) exercisable options for 76,240 shares of Company Common Stock granted to Mr. Smith on April 6, 1993, December 10, 1993, February 13, 1995 and March 15, 1996 under the Stock Option Plan and (ii) options for 4,000 shares of Company Common Stock granted to Mr. Smith on April 6, 1993 under the Stock Option Plan, which options will become exercisable within 60 days. (12) Share amount shown includes exercisable options and options which will become exercisable within 60 days for 287,667 shares of Company Common Stock granted to certain executive officers under the Stock Option Plan. *Less than 1%. RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS The Board of Directors recommends that shareholders ratify the appointment of Arthur Andersen LLP as independent public accountants to audit the Company's consolidated financial statements for the fiscal year ending January 29, 1999. A representative of Arthur Andersen LLP will be present at the meeting with the opportunity to make a statement if such representative so desires, and will be available to respond to appropriate questions raised orally at the meeting or submitted in writing to the Company's Secretary before the meeting. OTHER INFORMATION COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT Section 16(a) of the Securities Exchange Act of 1934 requires the Company's officers and directors, and persons who own more than ten percent of the Company's Common Stock, to file initial reports of ownership and reports of changes in ownership with the Securities and Exchange Commission and the New York Stock Exchange. Officers, directors and greater than ten-percent beneficial owners are required by Securities and Exchange Commission regulation to furnish the Company with copies of all Section 16(a) forms they file. To the best of the Company's knowledge, based solely on its review of the copies of such forms received by it, or written representations from certain reporting persons that no Section 16(a) forms were required for those persons, all Section 16(a) filing requirements applicable to its officers, directors and greater than ten-percent beneficial owners were complied with during the two fiscal years ended January 30, 1998. ADDITIONAL MATTERS The Board of Directors is not aware of any other matters that will be presented for action at the 1998 Annual Meeting. Should any additional matters properly come before the meeting, properly signed and dated proxies will be voted on those matters by the persons named therein in accordance with the best judgment of such persons. SUBMISSION OF SHAREHOLDER PROPOSALS The Company's By-Laws require that the Company be provided with written notice with respect to the nomination of a person for election as a director or the submission of any proposal at an annual meeting of 12 shareholders. Any such notice must include certain information concerning the nominating or proposing shareholder, and the nominee or the proposal, and must be furnished to the Company not less than 10 business days prior to such meeting. A copy of the applicable By-Law provision may be obtained, without charge, upon written request to the Secretary of the Company at the address set forth below. In addition, all shareholder proposals to be included in the Board of Directors' Proxy Statement and proxy for the 1999 Annual Meeting of shareholders (i) must be received by the Secretary of the Company not later than December 21, 1998, and (ii) must satisfy the conditions established by the Securities and Exchange Commission as necessary to entitle such proposal to be included in the Proxy Statement and form of proxy. COST OF PROXY SOLICITATION The Company will pay the cost of preparing, printing and mailing proxy materials as well as the cost of soliciting proxies on behalf of the Board of Directors. In addition to using the mails, officers and other employees of the Company may solicit proxies in person and by telephone and telegraph. REPORT TO SHAREHOLDERS The Company has mailed this Proxy Statement along with a copy of the Company's 1998 Annual Report to each shareholder entitled to vote at the Annual Meeting. Included in the 1998 Annual Report are the Company's consolidated financial statements for the fiscal year ended January 30, 1998. A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JANUARY 30, 1998, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, MAY BE OBTAINED WITHOUT CHARGE BY SENDING A WRITTEN REQUEST TO THE SECRETARY, LANDS' END, INC., ONE LANDS' END LANE, DODGEVILLE, WISCONSIN 53595. By order of the Board of Directors, LOGO Robert S. Osborne Secretary April 13, 1998 13 LANDS' END 1998 ANNUAL MEETING LOGO LANDS' END, INC. ANNUAL MEETING OF SHAREHOLDERS - MAY 13, 1998 This Proxy is Solicited on Behalf of the Board of Directors The undersigned hereby appoints Gary C. Comer, Michael J. Smith and Robert S. Osborne as Proxies, each with the power to appoint his substitute and hereby authorizes each of them to represent and to vote, as designated below, all of the shares of common stock of Lands' End, Inc. held of record by the undersigned on March 20, 1998, at the annual meeting of shareholders to be held on May 13, 1998, or any adjournment thereof. This proxy, when properly executed will be voted in the manner directed herein by the undersigned shareholder. If no direction is made, this Proxy will be voted FOR the election of the nominees listed in Item 1 and FOR Proposal 2. Please sign exactly as name appears below. When shares are held by joint tenants, both should sign. . DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED . LANDS' END, INC. 1998 ANNUAL MEETING 1. ELECTION OF DIRECTORS: 1 - John N. Latter 2 - Daniel Okrent 3 - Michael J. Smith [_] FOR all nominees [_] WITHHOLD AUTHORITY listed to the left (except to vote for all nominees as specified below). listed to the left. (Instructions: To withhold authority to vote for any indicated nominee, write the number(s) of the nominee(s) in the box provided to the right)[__________] 2. PROPOSAL TO APPROVE THE APPOINTMENT OF ARTHUR ANDERSEN LLP as the independent public accountants of the Company. [_] FOR [_] AGAINST [_] ABSTAIN 3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. Check appropriate box Date_________________ Indicate changes below. Address Change? [_] Name Change? [_] NO. OF SHARES [_______________________] Signature(s) in Box 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 President or other authorized officer. If a partnership, please sign in partnership name by authorized person.