DESIGNER HOLDINGS LTD
DEFR14A, 1997-04-25
WOMEN'S, MISSES', AND JUNIORS OUTERWEAR
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                            SCHEDULE 14A INFORMATION
    
          PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
                    EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)
     

Filed by the Registrant [X]
 
Filed by a Party other than the Registrant [ ]
 
Check the appropriate box:
 
<TABLE>
<S>                                             <C>
[ ]  Preliminary Proxy Statement                [ ]  Confidential, for Use of the Commission
                                                Only (as permitted by Rule 14a-6(e)(2))
[X]  Definitive Proxy Statement
[ ]  Definitive Additional Materials
[ ]  Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
 
                            DESIGNER HOLDINGS LTD.
- --------------------------------------------------------------------------------
                (Name of Registrant as Specified In Its Charter)
 
- --------------------------------------------------------------------------------
      (Name of Person(s) Filing Proxy Statement, if other than Registrant)
 
Payment of Filing Fee (Check the appropriate box):
 
[X]  No fee required.
 
[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
 
     (1)  Title of each class of securities to which transaction applies:
 
        ------------------------------------------------------------------------
 
     (2)  Aggregate number of securities to which transaction applies:
 
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     (3)  Per unit price or other underlying value of transaction computed
          pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
          filing fee is calculated and state how it was determined):
 
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     (4)  Proposed maximum aggregate value of transaction:
 
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     (5)  Total fee paid:
 
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[ ]  Fee paid previously with preliminary materials.
 
[ ]  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:
 
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     (2)  Form, Schedule or Registration Statement No.:
 
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     (3)  Filing Party:
 
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     (4)  Date Filed:
 
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<PAGE>   2
 
     Cash Bonus.  The annual cash bonus for certain executive officers is based
on annual performance goals. For 1996, the performance goals for Mr. Simon, Mr.
Dickson and Mr. Fidlon were target levels of EBITDA. The performance goal for
Mr. Gladstone was a target level of sales. The annual cash bonus for other
executive officers is determined by annual review by Mr. Simon and the
Compensation Committee and is based upon the financial performance of the
Company, the individual performance of such officers and the reasonableness of
the compensation relative to the industry. The determination of the bonuses of
such senior executives is based upon the recommendation of Mr. Simon, with final
approval by the Compensation Committee.
 
     Stock Options.  The Compensation Committee believes that stock options are
an appropriate vehicle to link employees' interest in the Company with those of
the Company's stockholders. Stock option awards are designed primarily to
provide strong incentives for superior longer-term performance and continued
employment with the Company. Because it is believed that corporate performance
is one of the principal factors influencing the market value of the Company's
Common Stock, the granting of stock options to executive officers encourages
them to work to achieve consistent improvements in corporate performance.
Options generally have a life of ten years, vest over three years, and have an
exercise price equal to the fair market value of the Common Stock on the date of
grant. Also, the exercisability of stock options is conditioned upon the
employee's continued employment with the Company; thus, unexercised stock
options are forfeited within a designated period of time following the executive
officer's leaving the Company. The stock option awards granted to employees in
1996 were set taking into account an individual's level of responsibility and
achievement. The determination of stock option awards is based upon the
recommendation of Mr. Simon, with final approval by the Compensation Committee.
 
     Section 162(m) of the Internal Revenue Code.  Section 162(m) of the
Internal Revenue Code generally disallows a tax deduction to public companies
for compensation in excess of $1,000,000 paid to a Company's chief executive
officer and any one of the four other most highly paid executive officers during
its taxable year.
 
     Qualifying performance-based compensation is not subject to the deduction
limit if certain requirements are met. The Section 162(m) limitation is not
applicable to Mr. Simon under the terms of his employment contract. It does not
appear that the Section 162(m) limitation will have a significant impact on the
Company in the near term. However, the Compensation Committee plans to review
this matter periodically and take such actions as are necessary to comply with
the new statute to avoid non-deductible compensation payments.
 
                                          COMPENSATION COMMITTEE OF THE
                                          BOARD OF DIRECTORS OF
                                          DESIGNER HOLDINGS LTD.
 
                                          Peter Damon Brown
                                          Frederick W. Zuckerman
 
                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    
CERTAIN INDEBTEDNESS OF MANAGEMENT
 
     The Company has advanced amounts to Mr. Simon totalling approximately
$1,722,000 as of March 31, 1997, in connection with personal expenses. Mr. Simon
has issued a promissory note to the Company in connection with such advances.
The note is due and payable in full on December 31, 1997, and bears interest at
8.25%. Accrued interest on the note through March 31, 1997 amounted to
approximately $57,000.
    
 
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