In 1996, the Company entered into a management agreement with SKM which provides for the payment of an annual fee of $150,000, payable quarterly in advance, in exchange for certain financial advisory services. This management agreement remains in effect until SKM or any of its affiliates’ total ownership of the Company’ Common Stock is less than 10% on a fully diluted basis. Pursuant to the management agreement, the Company incurred fees and expenses of approximately $160,000, $150,000 and $151,000 during fiscal 2001, fiscal 2000 and fiscal 1999, respectively. The Company and certain of its stockholders, who as of February 2, 2002 own in the aggregate a majority of the Common Stock, are parties to a Stockholders Agreement (the “Stockholders Agreement”). The Stockholders Agreement places certain limitations upon the transfer, in privately negotiated transactions, of shares of Common Stock beneficially owned by Ezra Dabah and the SK Funds. In addition, the Stockholders Agreement provides that (1) so long as Ezra Dabah, together with members of his family beneficially owns shares representing at least 25% of the shares of Common Stock owned by such parties on the date of the Stockholders Agreement, the stockholders party to the Stockholders Agreement will be obligated to vote all shares as to which they have voting rights in a manner such that the Board of Directors will at all times include three directors nominated by Ezra Dabah and (2) so long as the SK Funds beneficially own shares 38 11. RELATED PARTY TRANSACTIONS SKM Financial Advisory Services Stockholders Agreement 10. QUARTERLY FINANCIAL DATA (UNAUDITED) THE CHILDREN’S PLACE RETAIL STORES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table summarizes the quarterly financial data for the periods indicated (dollars in thousands, except for per share amounts): Fiscal Year Ended February 2, 2002 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales ...................................................... $160,461 $116,318 $181,433 $198,744 Gross profit ................................................... 68,162 40,819 84,070 86,619 Net income (loss) ........................................... 12,818 ( 3,892 ) 18,719 18,937 Basic net income (loss) per common share........... $0.49 $( 0.15 ) $0.71 $0.72 Diluted net income (loss) per common share ........ $0.48 $( 0.15 ) $0.70 $0.70 Fiscal Year Ended February 3, 2001 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales ...................................................... $130,181 $107,764 $165,885 $183,555 Gross profit ................................................... 56,749 40,451 72,520 78,258 Net income ................................................... 9,374 1,516 16,845 14,955 Basic net income per common share ................... $0.36 $0.06 $0.65 $0.58 Diluted net income per common share................. $0.36 $0.06 $0.63 $0.56