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:
[X] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Nantucket Industries, Inc.
----------------------------------
(Name of Registrant as Specified in Its Charter)
Nantucket Industries, Inc.
----------------------------------
(Name of Person[s] Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
(4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated and state how it was
determined.
[ ] 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:
NANTUCKET INDUSTRIES, INC.
FORMAL NOTICE OF SPECIAL MEETING IN LIEU OF
ANNUAL MEETING OF STOCKHOLDERS
to be held October 1, 1996
We are pleased to notify you that the Special Meeting in Lieu of Annual
Meeting of Stockholders of Nantucket Industries, Inc., a Delaware corporation,
will be held in the Board of Governors Room, American Stock Exchange, Inc., 86
Trinity Place, New York, New York, on October 1, 1996, commencing at 11:00 a.m.
on that day, and thereafter as it may be from time to time adjourned.
At the meeting, stockholders will consider and take action upon the
following proposals:
1. To set the number of directors constituting the Board of Directors
at nine and to elect those directors who have been nominated for terms expiring
in 1999.
2. To consider and vote on an Amendment to the Company's Certificate of
Incorporation to increase the authorized shares of Common Stock from six million
(6,000,000) shares with $.10 par value to twenty million (20,000,000) shares
with $.10 par value.
3. To consider and vote on a proposed Amendment to the Company's
Certificate of Incorporation to reduce certain voting requirements of the Board
of Directors necessary for approval of a business transaction with Related
Persons.
4. To ratify the appointment of Grant Thornton LLP, independent
certified public accountants, to audit the consolidated financial statements of
the Company and its subsidiaries for fiscal 1997.
5. To transact such other business as may properly be brought before
the meeting and any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on August 16,
1996 as the record date for the determination of the stockholders entitled to
receive notice of, and to vote at, the meeting. A form of proxy and a return
envelope which requires no postage are enclosed. We urge you to exercise your
privilege as a stockholder of Nantucket Industries, Inc. by voting upon the
business to come before the meeting either by signing and returning the enclosed
form of proxy or by casting your vote in person at the meeting.
` By Order of the Board of Directors
RONALD S. HOFFMAN
Secretary
105 Madison Avenue
New York, New York 10016
August ___, 1996
-1-
NANTUCKET INDUSTRIES, INC.
105 MADISON AVENUE
NEW YORK, NEW YORK 10016
PROXY STATEMENT
The form of proxy enclosed with this statement is solicited by the
Board of Directors of Nantucket Industries, Inc., a Delaware corporation (the
"Company"), for use at the Special Meeting in Lieu of Annual Meeting of
Stockholders of the Company (the "Special Meeting") to be held in the Board of
Governors Room, American Stock Exchange Inc., 86 Trinity Place, New York, New
York commencing at 11:00 a.m. on October 1, 1996, and at any adjournments
thereof. Stockholders of record at the close of business on August 16, 1996, are
entitled to notice of, and to vote at, the meeting. At the close of business on
August 16, 1996, there were outstanding 3,238,796 shares of Common Stock, par
value $.10 ("Common Stock"), each share being entitled to one vote. This proxy
statement and the accompanying notice and proxy are being mailed to the
Company's stockholders on or about August 29, 1996.
Each of the persons named as proxies in the enclosed form of proxy was
selected by the Board of Directors and is a director of the Company. The proxy,
if signed and returned, may, nevertheless, be revoked by the stockholder at any
time before it is exercised and will not in any way affect the stockholder's
right to attend the meeting and vote in person. Any revocation shall be effected
by filing with the Secretary of the Company at the Company's address set forth
above a written revocation or a duly executed proxy bearing a later date,
neither of which need be notarized. If the enclosed form of proxy is properly
executed and returned in time to be voted at the meeting, the proxies named
therein will vote the shares represented by the proxy in accordance with the
instructions marked thereon. Unmarked proxies will be voted for the election as
directors of the nominees of management and in favor of the ratification of the
appointment of Grant Thornton LLP as auditor and in favor of all other items set
forth herein. This solicitation of proxies is made by the Board of Directors and
all expenses of this solicitation will be paid by the Company.
I. ELECTION OF DIRECTORS
Under the Company's by-laws, the number of directors is to be fixed at
not fewer than three nor more than twelve. Pursuant to a vote of the Board of
Directors, the size of the Board has been set at nine directors, of which three
are to be elected at the meeting. Each of the persons named as proxies in the
enclosed form of proxy has stated that shares represented by the proxies given
will be voted to elect as directors of the Company the nominees of management
hereinafter listed. If any of the nominees should unexpectedly become
unavailable for election, the shares represented by the proxies will be voted
for a substitute nominee or nominees named by the Board of Directors of the
Company or will be voted to fix the number of directors at a lesser number than
nine which will reflect the number of nominees available for election.
-2-
The Company's Board of Directors is divided into three classes, the
terms of office of which expire in successive years as follows: Class I (current
term expires in 1997), Class II (current term expires in 1998) and Class III
(current term expiring at the special meeting). The directors who will stand for
election by the stockholders will be the Class III directors, whose terms of
office will not continue after the date of the meeting. Each of the nominees
listed below has indicated his willingness to serve if elected, and the Board of
Directors does not anticipate that any of them will become unavailable for
election. Messrs. Gold, Hoffman and Williams were previously elected directors
of the Company at meetings of stockholders and Mr. Klein was elected by the
Board of Directors.
The table below sets forth for each nominee for election as a director,
and for each director whose term of office will continue after the Special
Meeting, such person's name, age and other positions with the Company at the
date of this proxy statement, and the year such person was first elected as a
director:
<TABLE>
<CAPTION>
Director (Age) and Position with the Year First Elected Director
------------------------------------ ---------------------------
Company
-------
Class I - Current Term Expires in 1997
--------------------------------------
<S> <C> <C>
Stephen M. Samberg (51) Chairman of the Board and Chief 1988
Executive Officer
Robert M. Rosen* (51) 1983
Warren D. Cole* (37) 1994
Class II - Current Term Expires in 1998
---------------------------------------
George J. Gold (74) 1966
Joseph Visconti (50) President 1996
Kenneth Klein (58) 1996
Class III - Nominees for Terms Expiring in 1999
-----------------------------------------------
Donald D. Gold (70) 1966
Roger A. Williams* (48) 1994
Ronald S. Hoffman (53) Chief Financial Officer and Secretary 1994
* Member of the Audit and Compensation Committees
</TABLE>
Set forth below is information regarding the principal occupations of each
director during the past five years and other directorships held by each
director in public companies.
-3-
Warren D. Cole has been the Executive Vice President and Chief Financial Officer
of The Macklowe Organization, a large, privately held real estate investment,
development and management company based in New York City.
George J. Gold had been Chairman of the Board, Chief Executive Officer and
Treasurer of the Company, which positions he resigned on March 18, 1994.
Donald D. Gold had been the Secretary of, and since September 1993, Vice
Chairman of the Company, which positions he resigned on March 18, 1994. Until
September 1993, Mr. Gold also served as President of the Company.
Ronald S. Hoffman has been Chief Financial Officer of the Company since July,
1994 and Secretary thereof since October, 1994. Prior to his employment with the
Company, Mr. Hoffman was President of North Country Supply, Inc. and so served
for two years. From 1990 until 1992, Mr. Hoffman was a financial consultant to
clients in financial services and distribution activities. From 1984 until 1990,
he served as Chief Financial Officer of ElectroSound Group, Inc.
Kenneth Klein has been President and a director of National Capital Benefits
Corp. a financial services company since 1994. From January 1992 to March 1994
Mr. Klein was the President of Viatical Funding Company, a financial services
company. From January 1988 to January 1992, Mr. Klein was the Senior Vice
President, Chief Operating Officer and General Counsel of Amivest Corporation, a
New York Stock Exchange, Inc. Member Firm and an NASD Registered Investment
Advisor. Mr. Klein serves as a director pursuant to the Purchase Agreement with
NAN Investors, L.P. as further described under the heading "Certain
Relationships and Related Transactions."
Robert M. Rosen has been a partner in the law firm of Lane Altman & Owens LLP,
general counsel to the Company.
Stephen M. Samberg has been Chairman and Chief Executive Officer of the Company
since March 18, 1994. From September 1993 until December 31, 1995, Mr. Samberg
also served as President of the Company.
Roger A. Williams has been the Executive Vice President and Chief Financial
Officer of Guess ?, Inc. since March, 1994. From October 1992 to February 1994,
he served as Executive Vice President and Chief Financial Officer of The Donna
Karan Company. From July 1990 to October 1992, he was Executive Vice President -
Operations and Chief Financial Officer of Authentic Fitness Corporation, a
company formed in 1990 to acquire substantially all of the Activewear division
of Warnaco, Inc. From February 1988 through June 1990, Mr. Williams served as
Senior Vice President and Chief Financial Officer of Warnaco, Inc. Mr. Williams
serves as a director pursuant to the Agreement with the Guess Group as further
described under the heading "Certain Relationships and Related Transactions".
Joseph Visconti became President of the Company effective January 1, 1996. From
July 1995 through December 31, 1995, Mr. Visconti was President and Chief
Executive Officer of Salant Corp.'s Men's and Children's Apparel Division. From
June 1987 to June 1991, Mr. Visconti was President of the William Carter
Company.
-4-
All executive officers of the Company are directors.
Executive officers of the Company are elected annually for a term of office
expiring at the Board of Directors meeting immediately following the next
succeeding Annual Meeting of Stockholders, or until their successors are duly
elected and qualified; however, each of the Company's current executive officers
is employed under a written employment contract (described below).
George J. Gold and Donald D. Gold are brothers. None of the other directors or
executive officers of the Company are related to each other.
The Board of Directors held three meetings during the fiscal year ended March 2,
1996, including regularly scheduled and special meetings, and took action by
written consent on eight other occasions. The Board of Directors of the Company
does not have a nominating committee. The Company has established an Audit
Committee which approves the scope of, and reviews with the accountants the
results of, the annual audit and otherwise reviews and monitors the Company's
audit program. The Audit Committee held two meetings during the fiscal year
ended March 2, 1996. The Compensation Committee, which reviews the cash
compensation and employment arrangements of the Company's executive officers and
administers the Company's 1992 Executive Long Term Stock Option Plan, held one
meeting during fiscal 1996 and took action by written consent on two occasions.
No director attended less than 75%, in the aggregate, of the Board meetings and
meetings of committees on which he served which were held while he was a
director or committee member, respectively.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
- -------------------------------------------------
Based solely on a review of Forms 3 and 4 and amendments thereto,
furnished to the Company during the fiscal year ended March 2, 1996 and Forms 5
and amendments thereto furnished to the Company with respect to the fiscal year
ended March 2, 1996, no director, officer or beneficial owner of more than 10%
of the Company's equity securities failed to file on a timely basis reports
required by Section 16(a) of the Exchange Act during the fiscal year ended March
2, 1996.
EXECUTIVE COMPENSATION
- ----------------------
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Company has
furnished the following report on executive compensation:
Overview
- --------
During fiscal year 1996, the Compensation Committee (the "Committee")
consisted of Robert M. Rosen, Roger A. Williams and Warren D. Cole, each of
whom, while serving on the Committee, was a Director of the Company who was not
also an executive officer of the Company and who was not eligible for selection
as a person to whom stock options or bonus awards might
-5-
have been granted under the 1992 Plans (described below) or any other
discretionary plan of the Company entitling participants to acquire stock or
stock options of the Company. As of the date of this proxy statement, Messrs.
Rosen, Williams and Cole are members of the Committee.
The Committee is responsible for reviewing the cash compensation and
employment arrangements of the Company's executive officers and for
administering the Company's 1992 Long-Term Executive Stock Option Plan and 1992
Executive Performance Benefit Plan.
At the direction of the entire Board of Directors, the Committee has
made compensation decisions intended to place increased emphasis on
performance-based compensation. A key strategy has been a reduction in fixed
salaries and greater use of awards under the stock option and bonus plans
described below.
Specific compensation arrangements between the Company and most of its
senior executives, including the Company's Chief Executive Officer and its three
other most highly compensated executive officers (the "Named Executives"), are
set forth in written employment agreements with terms described below under the
caption "Employment Agreements and Change in Control Arrangements." These
agreements consist of the following key elements: annual payments of base salary
and/or commissions and discretionary awards of stock options and deferred cash
bonuses which are generally subject to forfeiture upon departure from the
Company.
Base Salaries
- -------------
The maximum annual compensation for the Chief Executive Officer was set
in 1994 at an amount approximating his annual compensation for each of the
previous three years, which consisted entirely of commissions. In recognition of
his duties as Chairman and Chief Executive Officer, the Committee believed that
a base salary supplemented by a discretionary bonus was the most appropriate
compensation mechanism. Based on this belief, his annual compensation was set as
a fixed base amount equal to $500,000 (representing approximately 60% of his
average annual compensation during the three years prior to 1994) and a
discretionary annual bonus equal to a maximum of $300,000 (representing
approximately 40% of his average annual compensation during such three years).
The Compensation Committee did not grant any bonus to the Chief Executive
Officer during fiscal 1996.
Other executive salaries are set at a level commensurate with that paid
by similar companies to similarly situated executives. In general, it is the
policy of the Company to provide executives with stock options and long term
performance-based incentives as a portion of their total compensation packages.
Further, in the case of executives whose performance is directly linked to
certain product lines, such executives' salaries are linked in whole or part to
the performance of that product line.
-6-
Stock Options
- -------------
In fiscal year 1993, the Company adopted the 1992 Executive Long-Term
Stock Option Plan pursuant to which employees, officers, directors and
consultants of the Company may be granted options to purchase the Company's
Common Stock. The plan is intended to give participants the opportunity to
obtain a proprietary interest in the Company and a direct stake in its
continuing performance, and, therefore, to more closely align the interests of
the participants with the interests of the Company and its stockholders. The
plan is also intended to provide participants with an incentive for continued
employment with the Company.
During fiscal 1996, an award was made under this Plan with an exercise
price of $3.00 per share to Joseph Visconti in connection with his employment
arrangements with the Company. The number of options awarded to such executive
was determined by the Committee based upon its evaluation of the expected effect
on the Company's long-term performance of such executive's efforts and continued
employment.
Bonus Awards
- ------------
In fiscal year 1993, the Company adopted the 1992 Executive Performance
Benefit Plan pursuant to which executives and key employees of the Company may
earn deferred compensation for achievement of individual or Company-wide sales,
earnings or other performance targets as the Committee selects. The amount of
each award is determined by the Committee after consideration of the executive's
or employee's total compensation, responsibilities and performance, as well as
the Company's business plan and prospects.
In fiscal year 1996, no awards were made under this Plan.
By the Compensation Committee
Robert M. Rosen
Warren D. Cole
Roger A. Williams
COMPENSATION OF DIRECTORS
Directors, other than those employed by the Company, are paid $5,000
annually and an additional $500 for each Board or committee meeting attended in
person.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The law firm of Lane Altman & Owens LLP, of which Robert M. Rosen, a
director of the Company and a member of the Compensation Committee, is a
partner, is general counsel to the Company. Legal fees for professional services
rendered by Lane Altman & Owens LLP to the Company accrued in fiscal 1996 were
in the amount of $167,708.
-7-
License fees for the Company's use of certain trademarks of Guess ?,
Inc., of which Roger A. Williams, a director of the Company and a member of the
Compensation Committee, is Chief Financial Officer, were $334,671 in fiscal
1996.
There are no other relationships or transactions involving members of
the Compensation Committee during the fiscal year ended March 2, 1996 required
to be reported pursuant to Item 402(j) of Regulation S-K.
SUMMARY COMPENSATION TABLE
The Summary Compensation Table shows compensation information for each
of the Company's Chief Executive Officers who served as such during the fiscal
year ended March 2, 1996 and each of the four other most highly compensated
executive officers of the Company during the fiscal years ended March 2, 1996,
February 25, 1995 and February 26, 1994.
The Summary Compensation Table appears on pages 9 and 10.
OPTION/SAR GRANTS IN FISCAL YEAR ENDED MARCH 2, 1996
See page 11.
AGGREGATED OPTION/SAR EXERCISES IN FISCAL YEAR ENDED
MARCH 2, 1996 AND FISCAL YEAR-END OPTION/SAR VALUES
See page 12.
LONG-TERM INCENTIVE PLANS - AWARDS IN FISCAL YEAR ENDED
MARCH 2, 1996
No Long Term Incentive Plan Awards were made to the CEO and other named
executives in the fiscal year ended March 2, 1996.
-8-
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
----------------------
AWARDS PAYOUTS
------ -------
ANNUAL COMPENSATION
-------------------
OTHER RESTRICTED ALL
ANNUAL STOCK OTHER
NAME AND PRINCIPAL FISCAL SALARY BONUS COMPENSATION AWARDS OPTIONS/SAR LTIP PAYOUTS COMPENSATION
POSITION YEAR ($)(1) ($) ($) # # ($) ($) (2)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Stephen M. Samberg 1996 $522,769 $0 $0 0 0 $0 $4,152
Chairman of the Board, 1995 $500,000 $0 $0 0 75,000 3 $0 $3,522
Chief Executive Officer,
Treasurer and Director 1994 $803,4964 $0 $0 0 0 $0 $11,560
Ronald S. Hoffman 1996 $152,885 $0 $0 0 0 $0 $3,696
Vice President-Finance, 1995 $98,0075 $0 $0 0 30,000 3 $0 $606
Chief Financial Officer,
Secretary and Director 1994 $0 $0 $0 0 0 $0 $0
Raymond L. Wathen 1996 $157,655 $0 $0 0 0 $0 $3,696
President-GUESS? 1995 $199,3346 $0 $0 0 37,500 3 $0 $3,522
Division and Director 13 1996 $234,1496 $0 $0 0 0 $0 $5,999
George G. Gold 7 1996 $0 $0 $0 0 0 $0 $356,730 8
Director 1995 $0 $0 $0 0 0 $0 $353,527 8
1994 $470,640 $0 $62,2499 0 0 $0 $103,847
Donald D. Gold 10 1996 $0 $0 $0 0 0 $0 $89,717 8
-9-
Director 1995 $0 $0 $0 0 0 $0 $89,272 8
1994 $322,822 $0 $29,0009 0 0 $0 $69,709
Stephen P. Sussman 11 1996 $146,769 $0 $0 0 0 $0 $4,087
1995 $144,000 $0 $0 0 22,500 3 $0 $3,744
1994 $148,846 $0 $0 0 0 $0 $3,582
Joseph Visconti 1996 $51,92312 $0 $0 0 30,000 3 $0 $0
President and Director 1995 $0 $0 $0 0 0 $0 $0
1994 $0 $0 $0 0 0 $0 $0
(1) Includes amounts deferred at the election of each of the named executive officers pursuant to the Company's 401(k) Profit
Sharing Plan.
(2) Comprised of 401(k) contributions and life insurance premiums which benefits are payable to the estates of the named executive
officers, except where specifically footnoted as pursuant to the Severance Agreement. For fiscal 1996, 401(k) contributions were:
Stephen M. Samberg, $3,000; Ronald S. Hoffman, $3,000; Raymond L. Wathen, $3,000; Stephen P. Sussman, $2,935. All other
compensation reported for fiscal 1996 hereunder comprised life insurance premiums.
(3) The options reflected were awarded pursuant to the company's 1992 Executive Long-Term Option Plan.
(4) Mr. Samberg's compensation in fiscal 1994 consisted entirely of commissions based on sales of the Company's mens'
undergarments.
(5) Mr. Hoffman was hired July 1, 1994.
(6) Compensation in each of fiscal 1996, 1995 and 1994 included commissions based on sales of the Company's GUESS? Products.
(7) Chairman of the Board, Chief Executive Officer and Treasurer through March 18, 1994.
(8) Amounts paid pursuant to the Severance Agreement dated as of March 18, 1994 more fully described hereinbelow.
(9) Automobile lease payments and related costs, including both personal and business portions thereof.
(10) Vice Chairman and Secretary through March 18, 1994.
(11) Vice President - Finance through October 10, 1994. Mr. Sussman currently manages the Company's production and distribution
facility in Cartersville, Georgia.
(12) Mr. Visconti was hired and became a director effective January 1, 1996.
(13) Mr. Wathen resigned as President of the GUESS? Division and as a director effective January 1, 1996.
</TABLE>
-10-
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
- -----------------------------------------------------------------------------------------------------------------
Number of
Securities % of Total
Underlying Options/SARs
Options/ Granted Exercise
SARs in or Base Expiration
Name Granted (#) Fiscal Year Price ($/Sh) Date 5% ($) 10% ($)
- ---- ------------ ------------ ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Joseph Visconti 1 30,000 2 100% $3.00 01/01/06 $366,000 $462,000
1 No individual grants of stock options or freestanding SARs were made
during the last completed fiscal year to the CEO or any other named executive
officer other than Joseph Visconti.
2 Options for the purchase of the Company's common stock, par value $.10.
Twenty percent of such options become exercisable on each of 1/1/97, 1/1/98,
1/1/99, 1/1/00 and 1/1/01.
-11-
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
----------------------------------------------------
AND FISCAL YEAR-END OPTION/SAR VALUES(1)
----------------------------------------
Value of Unexercised
In-The-Money Options/SARs
Shares at FY-End ($) Acquired Number of Securities Underlying
on Exercisable/Exercise (#) Unexercised Options/SARs at FY-End
Name Unexercisable(2) Value Realized ($) (#) Exercisable/Unexercisable
- ---- ---------------- ------------------ -----------------------------
<S> <C> <C> <C>
Stephen M. Samberg 0
$0/$0 $0 0/75,000
Ronald S. Hoffman 0
$0/$0 $0 0/30,000
Raymond L. Wathen 0
$0/$0 $0 0/37,500
George J. Gold 0
$0/$0 $0 0/0
Donald D. Gold 0
$0/$0 $0 0/0
Stephen P. Sussman 0
$0/$0 $0 0/22,500
Joseph Visconti 0
$0/$0 $0 0/30,000
</TABLE>
(1) There are currently no outstanding stock appreciation rights.
(2) No outstanding options were in the money at the end of fiscal 1996.
-12-
PERFORMANCE GRAPH
The performance graph immediately below shows changes over the past
five-year period in the value of $100 invested in (1) the Company's Common
Stock; (2) the American Stock Exchange market index; (3) an industry peer group
of two manufacturers of mens' and boys' underwear and nightwear (SIC Code 2322)
consisting of the Company and Munsingwear, Inc.; and (4) an industry peer group
of two manufacturers of women's, misses', children's, and infants' undergarments
(SIC Code 234), namely: Kleinert's Inc. and Wacoal Company.
TO BE INSERTED
-13-
EMPLOYMENT AND SEVERANCE AGREEMENTS AND CHANGE IN CONTROL ARRANGEMENTS
As of March 18, 1994, Messrs. George J. Gold and Donald D. Gold (the
"Golds") resigned their positions as executive officers of the Company and
entered into a Severance Agreement with the Company. The Severance Agreement
provides for an annual payment to the Golds of approximately $400,000, in the
aggregate, for each year of the five year term of the Severance Agreement. The
Severance Agreement also provides for the Company to pay them an amount equal to
their life and health insurance benefits and to continue paying one-half of each
of the Golds' share of the annual payments to his spouse in the event of his
death. Pursuant to the Severance Agreement, stock options for 20,000 and 10,000
shares of Common Stock issued to George and Donald Gold, respectively, under the
1992 Long-Term Incentive Stock Option Plan, and bonus awards for maximums of
$123,000 and $61,500 made to George and Donald Gold, respectively, under the
1992 Executive Performance Benefit Plan, were cancelled. Further, the Golds
agreed to relinquish their rights to receive ownership of the whole life
insurance policies on their lives described in the previous paragraph.
Under the Severance Agreement, the Company is also to provide certain
benefits to the Golds in respect of sales of shares of the Company's Common
Stock ("Shares") by them during the period September 1, 1994 to August 31, 1996
(the "Resale Period"). Such benefits provide, in general and subject to certain
limitations, that, for up to 100,000 Shares in the case of George J. Gold and
60,000 Shares in the case of Donald D. Gold, the Company will pay to the Golds
for each Share sold by them for less than $5.00 during the Resale Period, 80% of
the lesser of (a) $1.50 and (b) the difference between the sale price per Share
and $5.00. From October 1995 through May 1996, the Golds sold a total of 69,800
Shares at prices less than $5.00 and the Company paid to the Golds a total of
$33,906 as required under the Severance Agreement. Further, the Company will, in
general and subject to specific limitations, issue on April 1, 1997 warrants for
the purchase of up to 100,000 Shares by George J. Gold and up to 60,000 Shares
by Donald D. Gold. The number of such warrants issued to each of the Golds will
equal the number of shares sold by him during the Resale Period, subject to the
maximums described in the preceding sentence. As to each of the Golds, the
aggregate exercise price for the warrants issued to him will equal the aggregate
gross proceeds from his sales of Shares during the Resale Period.
As of March 1, 1994, the Company and Stephen M. Samberg, in connection
with his election as Chairman of the Board and Chief Executive Officer, entered
into a new employment agreement (the "1994 Agreement"). Mr. Samberg's current
annual base compensation is $518,000 and he is entitled to discretionary bonuses
as determined by the Compensation Committee, in an amount not to exceed $300,000
per year. The 1994 Agreement provides that Mr. Samberg is eligible for the
Company's other compensatory plans and that the Company will provide health and
disability insurance for Mr. Samberg and reimburse all reasonable business
expenses.
During fiscal 1993, the Company entered into an employment agreement
with Stephen P. Sussman for a term expiring on February 28, 1998. Mr. Sussman's
current base salary is $ 144,000. The agreement requires the Company to provide
health, life and disability insurance and to reimburse all reasonable
-14-
business expenses. In the event of the termination of Mr. Sussman's employment
by the Company, other than for good cause, or the expiration of the agreement
without renewal, the Company will be required to retain Mr. Sussman as a
consultant until February 28, 2003 for an annual fee of $40,000, plus benefits
comparable to those paid to officers of the Company.
On July 1, 1994, the Company entered into a one (1) year employment
agreement (extended through June 30, 1997) with Ronald S. Hoffman which provides
for an annual salary of $150,000. As additional contingent compensation, Mr.
Hoffman was granted options to purchase 30,000 shares of Common Stock under the
1992 Executive Long Term Stock Option Plan. The agreement requires the Company
to provide health and life insurance and to reimburse all reasonable business
expenses.
As of January 1, 1996, the Company entered into an Employment Agreement
with Joseph Visconti which provides for an annual salary of $200,000 plus a
bonus for each fiscal year based on increases in sales from those achieved in
fiscal 1996, which bonus in the first fiscal year shall not be less than
$100,000. Mr. Visconti was granted options to purchase 30,000 shares of Common
Stock under the Stock Option Plan. The agreement requires the Company to provide
health and disability insurance and to reimburse all reasonable business
expenses.
In addition to delineating the duties and responsibilities of each
executive employee, the employee's salary and certain fringe benefits, and the
circumstances under which employment with the Company may be terminated, the
employment agreements for Stephen M. Samberg, Ronald S. Hoffman, Joseph
Visconti, and Stephen P. Sussman, and the Severance Agreement also contain
certain provisions to take effect in the event of a "Change in Control." A
"Change in Control" generally is defined to include (i) a merger or
consolidation involving the Company pursuant to which less than 75% of the
outstanding voting securities or other beneficial interest of the surviving or
resulting corporation or other entity is held by the stockholders of the Company
other than those stockholders who acquire beneficial ownership of 20% or more of
the Company's outstanding stock after the date of each agreement; (ii) the
transfer to another corporation (other than a wholly owned subsidiary or a
corporation which is at least 75% owned by the Company's stockholders other than
those stockholders who acquire beneficial ownership of 20% or more of the
Company's outstanding stock after the date of each agreement) of substantially
all of the assets of the Company; (iii) the acquisition by any person of the
beneficial ownership of 35% or more of the Company's then outstanding
securities; (iv) a change in the composition of the majority of the Board of
Directors occurring within 24 months of the acquisition by any person of the
beneficial ownership of 10% or more of the Company's then outstanding
securities; or (v) the occurrence of any of the trigger events described in
Sections 11(a)(ii) or 13(a) of the Company's Shareholders Rights Plan.
In the event of any such Change in Control, certain specified benefits
("Termination Benefits") are provided for each such executive employee upon
termination of his employment by the Company other than for cause, or in the
event that he leaves the employ of the Company due to one of the following
events: (i) assignment inconsistent with his current status; (ii) distant
transfer; (iii) default by the Company under the employment agreement or other
agreement with the employee; (iv) failure on the part of the Company to provide
the employee with substantially similar plan benefits to those in which he had
been a participant; or (v) in the case of Messrs. Samberg, Visconti and Hoffman,
inability to effectively discharge his duties due to a Change in Control.
-15-
The amount of Termination Benefits payable to Mr. Samberg is
determinable only at the time of termination and is, if such termination is by
the Company or by Mr. Samberg following a default by the Company, in addition to
any other amounts due under his employment agreement. Cash benefits include (x)
three years' base salary (totaling $1,554,000) and (y) three times the average
annual bonus in the preceding three years (or such lesser number of years as
have elapsed since the agreement was made); the sum of (x) and (y) payable in a
lump sum and discounted to present value. Mr. Samberg, after an event giving
rise to Termination Benefits, would also have rights (a) for seven months
thereafter, to exercise or be compensated for any stock options or stock
appreciation rights; and (b) to the immediate vesting of any unvested equity or
deferred compensation rights.
Termination Benefits payable to Mr. Hoffman would comprise three annual
payments of $62,500 and fringe benefits for three years. Termination Benefits
payable to Mr. Sussman would equal a lump sum payment of $150,000 in addition to
any other amounts due under his employment agreement. The maximum amount of
Termination Benefits payable to each of the executives, except Mr. Hoffman, is
limited to an amount which would cause such individual not to receive "Excess
Parachute Payments" for purposes of Section 280G and 4999 of the Internal
Revenue Code.
With respect to the Golds, in the event that, following such a Change in
Control, (a) the Company defaults, in an amount greater than $1,000, in its
obligations to pay money to either of the Golds, such of the Golds, in addition
to all other benefits under the Severance Agreement, shall be entitled to a lump
sum payment of twice the annual payment due him, discounted to its then-present
value; or (b) the Company defaults in any other of its obligations to either of
the Golds, such of the Golds shall be entitled to a lump sum, discounted to its
present value, of the greater of (x) twice the annual payment due him, or (y)
the aggregate of the remaining payments due him under the Severance Agreement.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- --------------------------------------------------------------
The following table sets forth as of August 16, 1996 the beneficial
share ownership of each director and executive officer owning Common Stock, and
of all officers and directors as a group.
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percent of Class(1)
---------------- -------------------- -------------------
George J. Gold 452,918(2) 13.98%
209 Sterling Road
Harrison, NY 10528
Donald D. Gold 219,639(2) 6.78%
3670 Paces Ferry Road
Atlanta, GA 30327
Stephen M. Samberg 278,003(3)(6) 7.97%
105 Madison Avenue
New York, NY 10016
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Robert M. Rosen 9,000(4) *
101 Federal Street
Boston, MA 02110
Warren D. Cole 28,300 *
142 West 57th Street
New York, NY 10019
Ronald S. Hoffman 240,500(5)(6) 6.92%
105 Madison Avenue
New York, NY 10016
Roger A. Williams 3,000 *
1444 S. Alameda Street
Los Angeles, CA 90021
Joseph Visconti 0 *
105 Madison Avenue
New York, NY 10016
Kenneth Klein 0 *
275 Madison Avenue
Suite 2400
New York, NY 10016
All directors and officers as a
group (9 persons) 1,231,560(6) 35.65%
*Less than 1%
(1) Assumes that there are no exercises or conversions of outstanding
debentures, options or other commitments of the Company relating to
Common Stock, with the exception that Common Stock purchasable upon the
excercise of options or debentures that are exercisable within 60 days
of the date of the table are deemed to be outstanding and beneficially
owned in calculating percentage ownership.
(2) All such shares are subject to the Nantucket Industries Stock Voting
Trust u/i/d March 22, 1994 (the "Voting Trust").
(3) Includes 20,303 shares which are subject to the Voting Trust and 15,000
shares that may be issued to Mr. Samberg pursuent to immediately
exercisable stock options.
(4) 5,000 of such shares are owned by the Lane & Altman Profit Sharing
Trust DTD 11/28/92. Lane Altman & Owens LLP, of which Mr. Rosen is a
partner, is general counsel to the Company.
(5) 2,500 of such shares are owned by Mr. Hoffman's wife. Beneficial
ownership of all such shares is disclaimed by Mr. Hoffman. Includes
6,000 shares that may be used to Mr. Hoffman pursuant to immediately
exercisable stock options.
(6) Includes 232,000 shares representing the number of shares of Common
Stock into which the shares of Non-Voting Convertible Preferred Stock
held by The Samberg Group, L.L.C. may be converted (which ammount
includes accrued and unpaid cumulative dividends). Messrs. Samberg and
Sussman and Mr. Hoffman's wife, are members thereof, and, as such,
would share dispositive and voting power over such shares. Beneficial
ownership of all such shares is disclaimed by Mr. Hoffman.
-17-
In addition, each of the following has reported that it is the
beneficial owner of more than 5% of the outstanding Common Stock of the Company.
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percent of Class
---------------- -------------------- -------------------
Dimensional Fund Advisors, Inc. 176,765(1) 5.46%
1229 Ocean Avenue
Santa Monica, CA
The Samberg Group, L.L.C. 232,000(2) 6.68% (4)
105 Madison Avenue
New York, NY 10016
GUESS?, Inc. 422,835 13.06%
1444 South Alameda Street
Los Angeles, CA 90021
Guess Group(3) 714,500 22.06%
NAN Investors, L.P. 555,000 15.66% (5)
c/o Fundamental Capital Corp.
291 Ocean Avenue
Lawrence, NY 11559
(1) Dimensional Fund Advisors, Inc. is an investment advisor registered
under the Investment Advisors Act of 1940. Of this amount, Dimensional
Fund Advisors, Inc., has reported as of January 31, 1995 that it has
sole voting power of 110,230 shares.
(2) The Samberg Group, L.L.C. owns 5,000 shares of the Company's Non-Voting
Convertible Preferred Stock, which is convertible into 232,000 shares
of the Company's Common Stock. Messrs. Samberg, Sussman and Wathen and
Mr. Hoffman's wife are members of The Samberg Group.
(3) The Guess Group comprises Guess ?, Inc. ("GUESS?") and those other
Reporting Persons set forth in the Schedule 13D dated August 26, 1994
reporting the group's purchase from the Company on August 19, 1994 of
490,000 shares of Common Stock.
(4) In accordance with Rule 13d-3(d)of the 1934 Act, assumes the conversion
into 232,000 shares of Common Stock of the Non-Voting Convertible
Preferred Stock held by the Samberg Group, L.L.C.
(5) In accordance with Rule 13d-3(d) of the 1934 Act, assumes the
conversion of the 12.5% Convertible Subordinated Debentures in the
original principal amount of $1,168,150 into 305,000 shares of Common
Stock. NAN investors, L.P. also owns a 12.5% Convertible Subordinated
Debenture in the original principal amount of $1,591,850 which is
convertible after June 15, 1997 into 318,370 shares of Common Stock.
These securities were purchased on August 15, 1996 by NAN Investors
L.P. A Schedule 13D dated August 15, 1996 was filed reporting the
transaction. See "Certain Relationships and Related Transactions".
-18-
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- ----------------------------------------------
The Company, the Golds, Messrs. Samberg, Sussman, Raymond L. Wathen
(head of the Company's GUESS? Sales Division), Robert Polen (an employee of the
Company), and The Samberg Group, L.L.C., a limited liability company organized
in Delaware, entered into a Management Agreement as of March 1, 1994, pursuant
to which the Company on March 22, 1994 sold 5,000 shares of Non-Voting
Convertible Preferred Stock to The Samberg Group for $1,000,000. Such preferred
stock and accrued and unpaid cumulative dividends on such perfered stock are
convertible into shares of the Company's Common Stock at the rate of $5.00 per
share. Messrs. Samberg, Sussman, Wathen and Polen and Mr. Hoffman's wife are
each members of The Samberg Group.
The Management Agreement also provides that The Samberg Group, Messrs.
Samberg, Sussman, Wathen and Polen and the Golds will deposit all their Common
Stock into a voting trust. The voting of the shares deposited in said voting
trust is controlled by the terms of the trust instrument. Pursuant to the trust
instrument, such shares: (a) will be voted in favor of Donald D. Gold at the
Special Meeting; (b) were voted in favor of Messrs. George Gold and Wathen at
the Special Meeting in lieu of Annual Meeting of Stockholders held August 12,
1995; and (c) will be voted in favor of Messrs. Samberg, Rosen & Cole or their
designated replacements at the next Annual Meeting of Stockholders. Mr. Rosen
serves as the trustee of said voting trust.
The Management Agreement further provides for the cancellation of all
outstanding stock options and incentive awards granted prior to the date thereof
to the Golds and Messrs. Samberg, Sussman, Wathen and Polen and the issuance of
stock options for 150,000 shares of Common Stock in the aggregate to Messrs.
Samberg, Sussman, Wathen and Polen upon terms and conditions determined by the
Compensation Committee.
On August 19, 1994, the Guess Group bought 490,000 shares of Common
Stock pursuant to a Common Stock Purchase Agreement dated August 18, 1994 by and
among the Company, the Guess Group and the Samberg Group (the "Guess
Agreement"). Consideration paid was $6.00 in cash per share of Common Stock. All
shares sold were previously held by the Company as treasury stock.
-19-
The Guess Agreement provides the Guess Group with certain registration
rights and, with respect to the issuance of additional stock by the Company,
certain rights to purchase additional shares. The Agreement also provides
certain restrictions on the ability of the Guess Group to acquire additional
voting stock of the Company, to dispose of its Common Stock and to engage in
control transactions or proxy solicitations with respect to the Company.
The Guess Group has designated Roger A. Williams, the Executive Vice
President and Chief Financial Officer of GUESS?, to serve as a director of the
Company, and he has been so elected. The Guess Agreement requires the Company
and the Samberg Group to each use its best efforts to cause one individual
designated collectively by the Guess Group to be elected a director of the
Company at future annual meetings of the Company so long as the Guess Group and
their affiliates beneficially own in the aggregate at least the lesser of
490,000 shares of Common Stock or 15% of the outstanding Common Stock.
As a condition to the Guess Agreement, the Company amended its
Shareholders Rights Agreement so that the Guess Group's acquisition of Common
Stock would not trigger any defensive measures thereunder. Provisions were made
in each executive officer's employment agreement and the Severance Agreement so
that such acquisition would not be a "Change in Control" under those agreements.
The Company is licensed by GUESS? to manufacture and sell certain
garments under the GUESS? trademarks. Effective May 31, 1996, the License was
extended though the period ended May 31, 1999. The license is subject to early
termination if certain sales volume tests are not met. The license fee payable
to GUESS? for such rights are equal to seven percent of net sales of the
licensed products, subject to yearly minimums. In fiscal 1996, such license fees
were in the amount of $334,671.
On August 15, 1996, pursuant to a Common Stock and Convertible
Subordinated Debenture Purchase Agreement dated as of August 13, 1996 (the
"Purchase Agreement")between the Company and NAN Investors, L.P. (the
"Investor"), the Company sold to the Investor 250,000 shares of Common Stock for
an aggregate purchase price of $740,000, and two (2) 12.5% convertible
subordinated debentures of the Company in the original principal amounts of
$1,168,150 and $1,591,850, respectively, which debentures are convertible into
305,000 and 318,370 additional shares ("Conversion Shares") of Common Stock. All
shares sold and all Conversion Shares to be issued are authorized and unissued
shares of Common Stock reserved for issuance pursuant to the Purchase Agreement.
The debentures mature on August 15, 2001.
The Purchase Agreement provides the Investor with certain registration
rights. It also requires the Company and The Samberg Group to each use its best
efforts to cause Kenneth Klein to be elected as a director of the Company at
future annual meetings of the Company so long as the Investor and its affiliates
beneficially own in the aggregate at least the lesser of 250,000 shares of
Common Stock or 7% of the outstanding Common Stock. The Company has been advised
that Mr. Klein is not an affiliate of the Investor.
As a condition to the Purchase Agreement, the Board of Directors
approved for recommendation to the shareholders of the Company the Amendments to
the Company's Certificate of Incorporation described in Section II and III
below. Provisions were made in each executive
-20-
officer's employment agreement and the Severance Agreement so that the
investor's acquisition would not be a "Change in Control" under those
agreements.
Additional relationships and related transactions are described above,
under the caption "Compensation Committee Interlocks and Insider Participation."
VOTING REQUIRED, RECOMMENDATIONS OF THE BOARD OF DIRECTORS
- ----------------------------------------------------------
The three candidates receiving the highest numbers of "for" votes shall
be elected to the Company's Board of Directors. An abstention shall have the
same effect as a vote withheld for the election of directors, and, pursuant to
Delaware law, a broker non-vote will not be treated as voting in person or by
proxy on any proposal. The affirmative vote of a majority of the shares
represented, in person or by proxy, and voting at the Special Meeting (which
shares voting affirmatively also constitute at least a majority of the required
quorum) is required to set the number of directors constituting the Board of
Directors at nine.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" SETTING THE NUMBER OF
DIRECTORS CONSTITUTING THE BOARD OF DIRECTORS AT NINE AND THE ELECTION OF THE
NOMINEES AS CLASS III DIRECTORS.
II. RATIFICATION AND APPROVAL TO INCREASE THE NUMBER
OF AUTHORIZED SHARES OF COMMON STOCK
At a meeting held on August 9, 1996, the Board of Directors approved an
Amendment to the Company's Certificate of Incorporation, increasing the
authorized Common Stock from six million (6,000,000) shares of Common Stock with
$.10 par value to twenty million (20,000,000) shares of Common Stock with $.10
par value. The Company has no other formal plans, arrangements, understandings
or definitive commitments for the issuance of any additional common stock. There
are no pre-emptive rights authorized by the Certificate of Incorporation. The
Company believes that this number of shares will be sufficient for future
financings, for hiring additional personnel as needed for the Company's growth
and for potential mergers and acquisitions or for other similar transactions.
The issuance of additional shares of Common Stock will result in dilution to the
Company's then existing Stockholders.
Approval of the Amendment to the Certificate of Incorporation requires
an affirmative vote by the holders of a majority of the stock present in person
or represented by proxy and entitled to vote thereon at a meeting of the
stockholders (assuming a quorum exists.) Management intends to cast properly
executed proxies in favor of the increase of the common shares and the grant of
the authority to the Board of Directors for future issuances of such stock.
Proxies solicited by management will be voted in favor of this proposal unless a
contrary vote or authority withheld is specified.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION AND
APPROVAL OF THE INCREASE IN THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
-21-
III. RATIFICATION AND APPROVAL OF CHANGES
TO ARTICLE FOURTEENTH
OF THE CERTIFICATE OF INCORPORATION
At a meeting held on August 9, 1996, the Board of Directors approved an
Amendment to the Company's Certificate of Incorporation (a) deleting the words
"two thirds vote" in clause (i) of Paragraph 1 of Article Fourteenth and
inserting in place thereof the words "majority vote"; and (b) striking out
subparagraph (viii) of Article Fourteenth which now reads as follows:
"(viii) The term "Continuing Director" shall mean a director who
either was a member of the Board of Directors of the Corporation at or prior to
the time such Related Person became a Related Person or who subsequently became
a director of the Corporation and whose election, or nomination for election by
the Corporation's Stockholders, was approved by a vote of at least three-fourths
of the Continuing Directors then on the Board."
and inserting in place thereof:
"(viii) The term "Continuing Director" shall mean a director who
(1) was a member of the Board of Directors of the Corporation at or prior to the
time such Related Person became a Related Person, or (2) subsequently became a
director of the Corporation and whose election, or nomination for election by
the Corporation's Stockholders, was approved by a vote of at least a majority of
the Continuing Directors then on the Board."
These changes to the Certificate of Incorporation provide for a
reduction in certain voting requirements of the Board of Directors necessary for
approval of a business transaction with Related Persons from two-thirds to a
majority, and for a change in the definition of the term "Continuing Director."
Such changes are intended to increase the flexibility of the Board of Directors
in authorizing business transactions with significant stockholders.
Approval of the Amendment to the Certificate of Incorporation requires
an affirmative vote by the holders of a majority of the stock present in person
or represented by proxy and entitled to vote thereon at a meeting of the
stockholders (assuming a quorum exists.) Proxies solicited by management will be
voted in favor of this proposal unless a contrary vote or authority withheld is
specified.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATIONS AND
APPROVAL OF THE CHANGES TO THE CERTIFICATE OF INCORPORATION.
-22-
IV. SELECTION OF AUDITORS
The Board of Directors, acting upon the recommendation of the Audit
Committee, has appointed, subject to ratification by the stockholders, the firm
of Grant Thornton LLP, independent certified public accountants, to audit the
consolidated financial statements of the Company and its subsidiaries for fiscal
1997. Representatives of Grant Thornton, the Company's independent certified
public accountants, are expected to be present at the meeting with the
opportunity to make a statement if they desire to do so and to answer questions
from stockholders which are submitted in writing prior to the commencement of
the meeting.
The affirmative vote of a majority of the shares represented, in person
or by proxy, and voting at the Special Meeting (which shares voting
affirmatively also constitute at least a majority of the required quorum) is
required to ratify the Board of Directors' selection. If the stockholders reject
the nomination the Board of Directors will reconsider its selection.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF GRANT THORNTON LLP AS INDEPENDENT AUDITORS OF THE COMPANY FOR
FISCAL 1997.
V. STOCKHOLDER PROPOSALS AND OTHER MATTERS
Stockholder proposals intended for inclusion in the proxy material
relating to the 1997 meeting of stockholders must be received by the Company at
its principal offices not later than March 1, 1997.
STOCKHOLDERS OR BENEFICIAL OWNERS OF THE COMPANY'S COMMON STOCK MAY
OBTAIN A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
MARCH 2, 1996, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. A COPY OF
THAT REPORT, INCLUDING FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES,
MAY BE OBTAINED WITHOUT CHARGE BY DIRECTING A REQUEST THEREFOR TO RONALD S.
HOFFMAN, CHIEF FINANCIAL OFFICER, NANTUCKET INDUSTRIES, INC., 105 MADISON
AVENUE, NEW YORK, NEW YORK 10016.
The Board of Directors has no knowledge of any other matters which may
come before the meeting and does not intend to present any other matter. If any
such other matter should properly be brought before the meeting or any
adjournment or adjournments thereof, however, the persons named as proxies will
have discretionary authority to vote the shares represented by the accompanying
proxy in accordance with their own judgment.
August ___, 1996
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