UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 5)
Chic by H.I.S. Inc.
(name of issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
167113109
(CUSIP Number)
Arnold M. Amster
767 Fifth Avenue
New York, New York 10153
(212) 644-4500
(Name, Address, and Telephone Number of Person Authorized to
Receive Notices and Communications)
March 10, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box: [ ]
CUSIP No. 167113109
1) Name of Reporting Person Arnold M. Amster
S.S. or I.R.S. Identification No.
of Above Person (Intentionally
Omitted)
2) Check the Appropriate Box if a (a) [ ]
Member of a Group (b) [ ]
3) SEC Use Only
4) Source of Funds PF
5) Check if Disclosure of Legal
Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
6) Citizenship or Place of Organization United States
7) Sole Voting 99,700 shares
Power
Number of Shares 8) Shared Voting 818,900 shares
Power
9) Sole Dis- 99,700 shares
positive Power
10) Shared Dis- 818,900 shares
positive Power
11) Aggregate Amount Beneficially
Owned By Each Reporting Person 818,900 shares
12) Check box if the Aggregate Amount
in Row (11) Excludes Certain Shares [ ]
13) Percent of Class Represented by
Amount in Row (11) 8.3%
14) Type of Reporting Person IN
CUSIP No. 167113109
1) Name of Reporting Person Peggy J. Amster
S.S. or I.R.S. Identification No.
of Above Person (Intentionally
Omitted)
2) Check the Appropriate Box if a (a) [ ]
Member of a Group (b) [ ]
3) SEC Use Only
4) Source of Funds PF
5) Check if Disclosure of Legal
Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6) Citizenship or Place of Organization United States
7) Sole Voting -0-
Power
Number of Shares 8) Shared Voting 110,000 shares
Power
9) Sole Dis- -0-
positive Power
10) Shared Dis- 110,000 shares
positive Power
11) Aggregate Amount Beneficially
Owned By Each Reporting Person 110,000 shares
12) Check box if the Aggregate Amount
in Row (11) Excludes Certain Shares [ ]
13) Percent of Class Represented by
Amount in Row (11) 1.1%
14) Type of Reporting Person IN
CUSIP No. 167113109
1) Name of Reporting Person Peggy J. Amster,
as custodian for
Wendy Amster
S.S. or I.R.S. Identification No.
of Above Person (Intentionally
Omitted)
2) Check the Appropriate Box if a (a) [ ]
Member of a Group (b) [ ]
3) SEC Use Only
4) Source of Funds PF
5) Check if Disclosure of Legal
Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
6) Citizenship or Place of Organization United States
7) Sole Voting -0-
Power
Number of Shares 8) Shared Voting 54,500 shares
Power
9) Sole Dis- -0-
positive Power
10) Shared Dis- 54,500 shares
positive Power
11) Aggregate Amount Beneficially
Owned By Each Reporting Person 54,500 shares
12) Check box if the Aggregate Amount
in Row (11) Excludes Certain Shares [ ]
13) Percent of Class Represented by
Amount in Row (11) .6%
14) Type of Reporting Person IN
CUSIP No. 167113109
1) Name of Reporting Person The Amster
Foundation
S.S. or I.R.S. Identification No.
of Above Person (Intentionally
Omitted)
2) Check the Appropriate Box if a (a) [ ]
Member of a Group (b) [ ]
3) SEC Use Only
4) Source of Funds PF
5) Check if Disclosure of Legal
Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6) Citizenship or Place of Organization New York
7) Sole Voting -0-
Power
Number of Shares 8) Shared Voting 25,000 shares
Power
9) Sole Dis- -0-
positive Power
10) Shared Dis- 25,000 shares
positive Power
11) Aggregate Amount Beneficially
Owned By Each Reporting Person 25,000 shares
12) Check box if the Aggregate Amount
in Row (11) Excludes Certain Shares [ ]
13) Percent of Class Represented by
Amount in Row (11) .3%
14) Type of Reporting Person OO
CUSIP No. 167113109
1) Name of Reporting Person Amster & Co.
S.S. or I.R.S. Identification No.
of Above Person (Intentionally
Omitted)
2) Check the Appropriate Box if a (a) [ ]
Member of a Group (b) [ ]
3) SEC Use Only
4) Source of Funds WC
5) Check if Disclosure of Legal
Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
6) Citizenship or Place of Organization New York
7) Sole Voting -0-
Power
Number of Shares 8) Shared Voting 100,000 shares
Power
9) Sole Dis- -0-
positive Power
10) Shared Dis- 100,000 shares
positive Power
11) Aggregate Amount Beneficially
Owned By Each Reporting Person 100,000 shares
12) Check box if the Aggregate Amount
in Row (11) Excludes Certain Shares [ ]
13) Percent of Class Represented by
Amount in Row (11) 1.0%
14) Type of Reporting Person PN
CUSIP No. 167113109
1) Name of Reporting Person Flex Holding Corp.
S.S. or I.R.S. Identification No.
of Above Person (Intentionally
Omitted)
2) Check the Appropriate Box if a (a) [ ]
Member of a Group (b) [ ]
3) SEC Use Only
4) Source of Funds WC
5) Check if Disclosure of Legal
Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6) Citizenship or Place of Organization Delaware
7) Sole Voting -0-
Power
Number of Shares 8) Shared Voting 429,400 shares
Power
9) Sole Dis- -0-
positive Power
10) Shared Dis- 429,400 shares
positive Power
11) Aggregate Amount Beneficially
Owned By Each Reporting Person 429,400 shares
12) Check box if the Aggregate Amount
in Row (11) Excludes Certain Shares [ ]
13) Percent of Class Represented by
Amount in Row (11) 4.4%
14) Type of Reporting Person CO
This Amendment No. 5 amends and supplements the Schedule 13D
dated October 22, 1997 filed by Arnold M. Amster, Peggy J.
Amster, Peggy J. Amster, as custodian for Wendy Amster, The
Amster Foundation, Amster & Co. and Flex Holding Corp. relating
to the shares of the Issuer. Any terms not defined herein shall
have the meaning ascribed to them in the Schedule 13D dated
October 22, 1997.
Item 3. Source and Amount of Funds.
The response to Item 3 is hereby amended by deleting the
entire text thereof and inserting the following in lieu thereof.
The source and amount of funds (including commissions) used
by each of the Reporting Persons to acquire the shares of Common
Stock reported in Item 5 below was as follows:
Name Amount Source of Funds
Arnold M. Amster $125,250 Personal funds*
Peggy J. Amster $607,500 Personal funds*
Peggy J. Amster, $ 93,750 Personal funds*
as custodian for Wendy
Amster
Flex Holding Corp. $156,724 Working capital*
_______________
* The shares of Common Stock owned by Arnold M. Amster, Peggy
J. Amster, Peggy J. Amster, as custodian for Wendy Amster
and Flex Holding Corp. were purchased in their respective
brokerage margin accounts on customary terms.
Item 4. Purpose of Transaction.
The response to Item 4 is hereby amended by adding the
following: Effective March 7, 1998, Arnold Amster became a
director of the Issuer. See the Proxy Statement for the 1998
Annual Meeting of Stockholders of Chic By H.I.S., Inc., attached
as Exhibit 1 hereto.
Item 5. Interest in Securities of the Issuer
The response to Item 5 is hereby amended by deleting the
entire text thereof and inserting the following in lieu thereof.
Set forth below is certain information concerning all
transactions in the Common Stock in which the Reporting Persons
have engaged during the past 60 days. All of the shares of
Common Stock that were purchased on March 10, 1998 were purchased
in a privately negotiated transaction. All other shares of
Common Stock were effected on the New York Stock Exchange.
Name Amount Bought/Sold Price Date
Arnold M. Amster 16,700 Bought $7.50 03/10/98
Peggy J. Amster 81,000 Bought $7.50 03/10/98
Peggy J. Amster, 12,500 Bought $7.50 03/10/98
as custodian for
Wendy Amster
Flex Holding Corp. 10,000 Bought $7.00 1/15/98
6,500 Bought $6.88 1/16/98
5,000 Bought $7.13 1/23/98
900 Bought $7.06 1/28/98
The ownership by the Reporting Persons of shares of Common
Stock and the percentage of the outstanding shares of Common
Stock represented thereby is as follows:
Name Number of Shares Percentage
Arnold M. Amster 818,900(1) 8.3%(1)
Peggy J. Amster 110,000(2) 1.1%(2)
Peggy J. Amster, 54,500 .6%
as custodian for
Wendy Amster
The Amster Foundation 25,000 .3%
Amster & Co. 100,000 1.0%
Flex Holding Corp. 429,400 4.4%
_________
(1) Includes an aggregate of 719,200 shares of Common Stock
owned by the other Reporting Persons. Arnold M. Amster
shares voting and dispositive power with respect to the
shares of Common Stock owned by the other Reporting Persons
and may be deemed the beneficial owner of all of the shares
of Common Stock owned by the other Reporting Persons.
Arnold Amster disclaims beneficial ownership of any of the
shares of Common Stock owned by the other Reporting Persons.
(2) Excludes 60,000 shares of Common Stock owned by Peggy J.
Amster as custodian for Wendy Amster, as to which shares
Peggy J. Amster disclaims beneficial ownership.
SIGNATURES
After reasonable inquiry and to the best knowledge and
belief of each person or entity set forth below, each such person
or entity certifies that the information set forth in this
Statement is true, complete, and correct.
March 16, 1998 /s/ Arnold M. Amster
Arnold M. Amster
March 16, 1998 /s/ *
Peggy J. Amster
March 16, 1998 /s/ *
Peggy J. Amster, as custodian
for Wendy Amster
March 16, 1998 THE AMSTER FOUNDATION
By /s/ Arnold M. Amster
Arnold M. Amster
March 16, 1998 AMSTER & CO.
By /s/ Arnold M. Amster
Arnold M. Amster, General
Partner
March 16, 1998 FLEX HOLDING CORP.
By /s/ Arnold M. Amster
Arnold M. Amster, Chairman
of the Board
* By /s/ Arnold M. Amster
Arnold M. Amster
Attorney-in-fact
CHIC BY H.I.S, INC.
March 16, 1998
Dear Stockholder:
On behalf of the Board of Directors, I wish to extend to you
a cordial invitation to attend the Annual Meeting of Stockholders
of Chic by H.I.S, Inc., which will be held at 10:00 a.m., New
York time, on April 15, 1998 at the Doral Tuscany Hotel, 120 East
39th Street, New York, New York.
At the Annual Meeting, the stockholders will be asked to
vote on the election of seven directors and to ratify and approve
the appointment by the Board of Directors of the Company's
independent auditors of the Company's consolidated financial
statements for the fiscal year ending November 7, 1998, and to
transact such other business as may properly come before such
meeting or any adjournment or adjournments thereof.
I hope you will use this opportunity to take an active part
in the affairs of your Company by voting on the business to come
before the Annual Meeting either by executing and returning the
enclosed proxy or by casting your vote in person at the Annual
Meeting.
It is important that your shares be represented at the
Annual Meeting, whether or not you are able to attend.
Accordingly, you are urged to sign, date and mail the enclosed
proxy promptly. If you later decide to attend the Annual Meeting,
you may revoke your proxy and vote in person.
Thank you.
Sincerely,
BURTON M. ROSENBERG
Chairman of the Board and
Chief Executive Officer
CHIC BY H.I.S, INC.
1372 Broadway
New York, New York 10018
---------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held April 15, 1998
---------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders of Chic by H.I.S, Inc. (the 'Company') will be held
on April 15, 1998 at 10:00 a.m., New York time at the Doral
Tuscany Hotel, 120 East 39th Street, New York, New York (the
'Annual Meeting'), for the following purposes:
1. To elect seven directors of the Company to serve
until the Company's next Annual Meeting of Stockholders or
until their respective successors have been duly elected and
shall have qualified;
2. To ratify and approve the appointment of BDO
Seidman, LLP by the Board of Directors as independent
auditors of the Company's consolidated financial statements
for the fiscal year ending November 7, 1998; and
3. To transact such other business as may properly
come before the Annual Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on
March 16, 1998 as the record date for the determination of
stockholders entitled to notice of and to vote at the Annual
Meeting and at any adjournment thereof.
For the ten-day period immediately prior to the Annual
Meeting, a list of stockholders entitled to vote at the Annual
Meeting will be available for inspection at the offices of the
Company, located at 1372 Broadway, New York, New York, for such
purposes as are set forth in the General Corporation Law of the
State of Delaware.
By Order of the Board of Directors
STUART JAEGER
Secretary
March 16, 1998
IMPORTANT
Whether or not you expect to attend the Annual Meeting in person,
to assure that your shares will be represented, please complete,
date, sign and return the enclosed proxy without delay in the
enclosed envelope, which requires no additional postage if mailed
in the United States. Your proxy will be revocable, either in
writing or by voting in person at the Annual Meeting, at any time
before its exercise.
CHIC BY H.I.S, INC.
1372 Broadway
New York, New York 10018
--------------------------
PROXY STATEMENT
--------------------------
INTRODUCTION
This Proxy Statement is furnished by the Board of Directors
(the 'Board of Directors' or the 'Board') of Chic by H.I.S, Inc.
(the 'Company') in connection with the solicitation by the Board
of Directors of proxies to be voted at the Company's Annual
Meeting of Stockholders to be held on April 15, 1998 at 10:00
a.m., New York time at the Doral Tuscany Hotel, 120 East 39th
Street, New York, New York and at any adjournment or adjournments
thereof (the 'Annual Meeting'), for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders. This Proxy
Statement and the accompanying form of proxy are first being
mailed to stockholders on or about March 16, 1998.
VOTING AT ANNUAL MEETING
General
The Board of Directors has fixed the close of business on
March 16, 1998 as the record date (the 'Record Date') for the
determination of stockholders entitled to notice of and to vote
at the Annual Meeting. As of the Record Date, there were issued
and outstanding 9,835,868 shares of the Company's Common Stock,
par value $.01 per share (the 'Common Stock'). The holders of
record on the Record Date of shares of Common Stock entitled to
be voted at the Annual Meeting are entitled to cast one vote per
share on each matter submitted to a vote at the Annual Meeting.
Accordingly, a total of 9,835,868 votes are entitled to be cast
on each matter submitted to a vote at the Annual Meeting. A
majority of such votes, present in person or represented by proxy
at the Annual Meeting, will constitute a quorum for the
transaction of business at the Annual Meeting.
Proxies
Shares of Common Stock which are entitled to be voted at the
Annual Meeting and which are represented by properly executed
proxies and received in time for the Annual Meeting will be voted
in accordance with the instructions indicated on such proxies. If
no instructions are indicated, such shares will be voted FOR the
election of each of the nominees indicated thereon for election
as directors, FOR the ratification and approval of the
appointment by the Board of Directors of BDO Seidman, LLP as
independent auditors of the Company's consolidated financial
statements for the fiscal year ending November 7, 1998, and in
the discretion of the proxy holder as to any other matters which
may properly come before the Annual Meeting. A stockholder who
has executed and returned a proxy may revoke it at any time
before it is voted at the Annual Meeting by executing and
returning a proxy bearing a later date, by giving written notice
of revocation to the Secretary of the Company bearing a date
later than the proxy or by attending the Annual Meeting and
voting in person. Shares as to which a broker indicates it has no
discretion to vote, and which are not voted, will be considered
not present at the Annual Meeting for the purpose of determining
the presence of a quorum and as unvoted for approving the
election of directors and for approving the appointment of BDO
Seidman, LLP as independent auditors. Proxies marked as
abstaining on any matter to be acted on by the stockholders will
be treated as present at the Annual Meeting for the purpose of
determining the presence of a quorum but will not be counted as
votes cast on such matters. The votes of stockholders present in
person or represented by proxy at the Annual Meeting will be
tabulated by an inspector of elections appointed by the Company.
The inspector's duties include determining the number of shares
represented at the Annual Meeting, counting all votes and ballots
and certifying the determination of the number of shares
represented and the outcome of the balloting.
The Company will bear all the costs and expenses relating to
the solicitation of proxies, including the costs of preparing,
printing and mailing to stockholders this Proxy Statement and
accompanying materials. In addition to the solicitation of
proxies by use of the mails, the directors, officers and
employees of the Company, without additional compensation, may
solicit proxies personally or by telephone or telecopy.
Arrangements will be made with brokerage firms, banks or other
custodians, nominees and fiduciaries for the forwarding of
solicitation materials to the beneficial owners of the
shares of Common Stock held by such persons, and the Company will
reimburse such brokerage firms, banks, custodians, nominees and
fiduciaries for reasonable out-of-pocket expenses incurred by
them in connection therewith.
Vote Required
The affirmative vote of a plurality of the shares of Common
Stock present in person or represented by proxy at the Annual
Meeting is required to elect the nominees for election as
directors of the Company at the Annual Meeting. The affirmative
vote of a majority of the shares of Common Stock present in
person or represented by proxy at the Annual Meeting is required
to ratify and approve the appointment of BDO Seidman, LLP as
independent auditors of the Company's consolidated financial
statements for the fiscal year ending November 7, 1998.
BACKGROUND OF CHANGE IN CONTROL
On January 13, 1998 the Company received a letter dated
January 12, 1998 from Herbert A. Denton of Providence Capital,
Inc., notifying the Company of his intention to nominate 10
individuals for election to the Board at the 1998 Annual Meeting
of Stockholders. In order to avoid a costly and time-consuming
election contest and to further the interests of the Company's
stockholders, the Company reached an agreement with Mr. Denton to
reconstitute the Board to broaden representation on the Board.
Thereafter, at a special meeting of the Board held on February
20, 1998, the Board authorized a reduction of its size from ten
to nine members and the Board accepted the resignation of seven
of its members. The members resigning were Milan Danek, Hirsh
Jacobson, Roland L. Kimberlin, Robert F. Luehrs, Jesse S. Siegel,
Rica Spector and Edward J. Walsh, Jr. (the 'Resigning
Directors'). The continuing Directors are Burton M. Rosenberg,
Richard K. Howe and Harvey Silverman (the 'Continuing
Directors'). The Board then elected Arnold M. Amster, Herbert A.
Denton, Daniel Rubin and Kenneth Zimmerman (the 'New Directors')
to fill the vacancies so created. The newly reconstituted Board
became effective on March 7, 1998 (the 'Effective Date'). The two
remaining vacancies on the Board may be filled by the unanimous
consent of the Directors of the reconstituted Board.
PRINCIPAL STOCKHOLDERS OF THE COMPANY
The following table sets forth information regarding each
person known by the Company to own beneficially (as such term is
defined in Rule 13d-3 under the Exchange Act) more than 5% of the
outstanding Common Stock as of the Record Date. In accordance
with the rules promulgated by the Securities and Exchange
Commission, such ownership includes shares currently owned as
well as shares which the named person has the right to acquire
within 60 days, including, but not limited to, shares which the
named person has the right to acquire through the exercise of any
option, warrant or right, or through the conversion of a
security.
Number of Shares
of Common Stock
Name and Address Beneficially Percentage
of Beneficial Owner Owned of Common Stock
- ---------------------------- ----------------- -----------------
Pioneering Management
Corporation(1) 879,000 8.9%
60 State Street
Boston, MA 02109
Dimensional Fund
Advisors Inc.(1) 539,300 5.5
1299 Ocean Avenue
Santa Monica, California 90401
Franklin Resources,
Inc.(1)(2) 970,100 9.9
777 Mariners Island Blvd.
San Mateo, California 94404
Arnold M. Amster(3) 818,900 8.3
767 Fifth Avenue
New York, NY 10153
J. Ezra Merkin(1)(4) 880,100 9.0
919 Third Avenue
New York, NY 10022
T. Rowe Price Associates,
Inc.(1) 600,000 6.1
100 E Pratt Street
Baltimore, MD 21202
- ---------
(1) Based solely on information obtained from a report on
Schedule 13G filed with the Securities and Exchange
Commission.
(2) Includes securities beneficially owned by one or more open
or closed-end investment companies or other managed accounts
which are advised by direct or indirect subsidiaries of
Franklin Resources, Inc., of which Charles B. Johnson,
Rupert H. Johnson, Jr. and Franklin Advisory Services, Inc.
may be deemed to be beneficial owners.
(3) Includes 110,000 shares held by Mr. Amster's spouse and
54,500 shares held by Mr. Amster's spouse, as custodian for
their daughter. Also includes 25,000 shares held by the
Amster Foundation, a private family foundation, controlled
by Mr. Amster. Also includes 100,000 shares held by Amster &
Co., an investment limited partnership of which Mr. Amster
is the Senior Managing Partner. Also includes 429,400 shares
held by Flex Holding Corp., a private investment company of
which Mr. Amster is the Chairman of the Board. Mr. Amster
disclaims beneficial ownership to the foregoing shares.
(4) Includes 355,578 shares of Common Stock owned by Gabriel
Capital, L.P. and 524,522 shares of Common Stock owned by
Ariel Fund Limited, of which J. Ezra Merkin and Ariel
Management Corp., the Investment Advisor of Ariel Fund
Limited, may be deemed to be the beneficial owner.
-------------------
To the knowledge of the Company, except as set forth above,
no person beneficially owns more than 5% of the Common Stock.
The following table sets forth beneficial and record
ownership of the Company's Common Stock as of the date hereof
with respect to (i) each Resigning Director, Continuing Director
and New Director of the Company; (ii) each executive officer
named in the Summary Compensation Table under 'Executive
Compensation'; (iii) all Continuing Directors, Resigning
Directors and executive officers as a group; and (iv) all
Continuing Directors, New Directors and executive officers as a
group.
Number of Shares Percentage of
of Common Stock Common Stock
Beneficially Beneficially
Name of Beneficial Owner Owned Owned
- ---------------------------- ---------------- ---------------
Burton M. Rosenberg 151,385(a) 1.5%
Milan Danek 45,306 (b)
Richard K. Howe 15,000(c) (b)
Hirsh Jacobson 10,000(c) (b)
Roland L. Kimberlin 148,385(d) 1.5
Robert F. Luehrs 137,885(d) 1.4
Jesse S. Siegel 10,000(c) (b)
Harvey Silverman 10,700(c) (b)
Rica Spector -- --
Edward J. Walsh, Jr. 12,000(c) (b)
Stephen Weiner 61,877(e) (b)
Arnold M. Amster 818,900(f) 8.3
Herbert A. Denton 85,000(g) (b)
Daniel Rubin 94,100(h) (b)
Kenneth Zimmerman 238,600 (i) 2.4
All Continuing Directors and Resigning Directors
and executive officers
as a group (13 persons) 618,538 6.2
All Continuing Directors
and New Directors and
executive officers as
a group (13 persons) 1,823,138 18.3
- ---------
(a) Includes 30,000 shares of Common Stock that Mr. Rosenberg
has the right to acquire pursuant to outstanding stock
options. Also includes 4,000 shares of Common Stock that Mr.
Rosenberg's spouse has the right to acquire pursuant to
outstanding stock options, as to which shares Mr. Rosenberg
disclaims beneficial ownership.
(b) Represents less than one percent of the issued and
outstanding shares of Common Stock.
(c) Includes 10,000 shares of Common Stock that each of Messrs.
Howe, Jacobson, Siegel, Silverman and Walsh has the right to
acquire pursuant to outstanding stock options. The options
held by Messrs. Jacobson, Siegel and Walsh will expire on
June 17, 1998, unless exercised prior to such date.
(d) For each of Mr. Kimberlin and Mr. Luehrs, includes 30,000
shares of Common Stock that each has the right to acquire
pursuant to outstanding stock options. With respect to Mr.
Kimberlin, also includes 4,000 shares of Common Stock that
his spouse has the right to acquire pursuant to outstanding
stock options, as to which shares Mr. Kimberlin disclaims
beneficial ownership.
(e) Includes 18,000 shares of Common Stock that Mr. Weiner has
the right to acquire pursuant to outstanding stock options
and 1,930 shares of Common Stock held by Mr. Weiner's
spouse. Excludes 1,250 shares of Common Stock held by Mr.
Weiner as custodian for his son under the Uniform Gifts to
Minors Act, as to which shares Mr. Weiner disclaims
beneficial ownership.
(f) See footnote (3) in the table above.
(g) Includes 1,000 shares owned by Providence Capital, Inc. over
which Mr. Denton exercises sole voting and investment powers
and 80,000 shares owned by Providence Investors, LLC over
which Mr. Denton has shared voting and investment power.
(h) Includes 35,000 shares owned by Mr. Rubin's father over
which Mr. Rubin has shared voting power.
(i) Includes an aggregate of 5,300 shares held by Zachary
Zimmerman, Ryan Zimmerman, Matthew Zimmerman and Nicole
Zimmerman, which shares may be deemed beneficially owned by
Mr. Zimmerman.
ELECTION OF DIRECTORS
(Item 1)
Nominees For Election as Directors
Directors generally are elected by the affirmative vote of a
plurality in voting power present in person or represented by
proxy and entitled to vote, and hold office until the next annual
meeting of stockholders and until their successors are duly
elected and qualified or until their earlier death, resignation,
removal or disqualification.
The following table sets forth certain information with
respect to the persons nominated by the Board of Directors for
election as directors of the Company at the Annual Meeting. The
Company's Board of Directors currently consists of seven members.
The two remaining vacancies on the Board may be filled by the
unanimous consent of the members of the reconstituted Board.
The Board of Directors knows of no reason why any of its
nominees will be unable or will refuse to accept election. If any
nominee becomes unable or refuses to accept election, the Board
of Directors either will reduce the number of directors to be
elected or select a substitute nominee. If a substitute nominee
is selected, proxies will be voted in favor of such nominee.
Director
Name Age Position Since
- -------------- ----------- ---------- ---------
Burton M. Rosenberg 66 Chief Executive 1988
Officer; Chairman
of the Board;
Director; Member
of the Office
of Chairman
Arnold M. Amster 57 Director; Member 1998
of the Office
of Chairman
Herbert A. Denton 50 Director 1998
Richard K. Howe 54 Director 1993
Daniel Rubin 49 Director; Member 1998
of the Office of
the Chairman
Harvey Silverman 64 Director 1993
Kenneth Zimmerman 47 Director 1998
-------------------
Set forth below is a summary of the business experience of
each person listed in the table above.
Burton M. Rosenberg is the Chief Executive Officer, Chairman
of the Board and Member of the Office of the Chairman of the
Company and has been a director of the Company since December
1988. Mr. Rosenberg served as the Company's Chief Financial
Officer from 1969 to 1986 and then as President and Chief
Executive Officer. Mr. Rosenberg has worked over 28 years at the
Company. He holds a B.A. and an M.A. from Brooklyn College, an
M.B.A. from Columbia University, and a Ph.D. in Economics from
New York University.
Arnold M. Amster has been the Senior Managing Partner of
Amster & Co. and the Chairman of the Board of Flex Holding
Corporation, both private investment companies, and a director of
BEM International, a money management firm, since prior to 1990.
Herbert A. Denton has been the President of Providence
Capital, Inc., a private investment firm and registered broker
dealer, since 1991. He is also a director of Mesa Air Group Inc.,
the largest independently-owned commuter airline in the world.
Richard K. Howe has been a director of the Company since May
1993. Since June 1992, Mr. Howe has been a director of Back Bay
Restaurant Group Inc., which is a publicly held company. Prior to
June 1992, Mr. Howe was an executive vice president and a
director of Tucker Anthony Incorporated and an officer or
director, or both, of its parent companies and affiliates and
thereafter, until March 1996, served as a consultant to those
companies. In addition, from 1980 to 1987, Mr. Howe was a general
partner (1980-82), an executive vice president and a director of
Prescott, Ball & Turben, a Cleveland-based investment banking
firm, and previously was a partner of Squire, Sanders & Dempsey,
a Cleveland-based law firm.
Daniel Rubin has been a Managing Partner of LDR Equities,
LLC, which engages in the management of real estate, textile and
clothing businesses since 1996. He has also been a principal
stockholder of Trimtex Company, a textile manufacturer and Gorden
& Ferguson, a manufacturer of men's and children outerwear, since
1987. Mr. Rubin is also a director of Community State Bank.
Harvey Silverman became a director of the Company in 1993.
Since 1986, Mr. Silverman has been the Chief Financial Officer
and Treasurer of Meltzer Industries Corporation, a manufacturer
of children's apparel. Since 1988, Mr. Silverman has been the
President of Judyanna Ltd., a sweater manufacturer. In addition,
since 1991 Mr. Silverman has been the Chairman of the Board of
Quicksilver Development Corp., a computer software developer. Mr.
Silverman has been a certified public accountant since 1962.
Kenneth Zimmerman was the founder and has been the Chief
Executive Officer, the President and the sole stockholder of
Kenar Enterprises, Ltd., a privately held women's apparel
manufacturer and retailer for the past twenty-one years.
Additional Information Regarding the Company's Board of Directors
The Company's Board of Directors met seven times during the
fiscal year ended November 1, 1997. The Company's Board of
Directors has standing Compensation and Audit Committees, the
members of each of which are elected by the Board of Directors at
its annual meeting. On the Effective Date, the Board of Directors
established an Office of the Chairman. The Board of Directors
does not have a standing nominating committee.
Prior to the Effective Date, the Compensation Committee
consisted of Mr. Jacobson, Mr. Silverman, Ms. Spector and Mr.
Walsh. The Compensation Committee met twice during the fiscal
year ended November 1, 1997 and also took action by unanimous
written consent. The Compensation Committee establishes
remuneration levels for officers of the Company, reviews
management organization and development, reviews significant
employee benefit programs and establishes, as it deems
appropriate, and administers executive compensation programs,
including bonuses, stock option and other equity-based programs,
and other cash or stock incentive programs.
On the Effective Date, the Board of Directors elected
Herbert Denton (Chairman), Kenneth Zimmerman, Richard Howe and
Arnold Amster to serve as members of the Compensation Committee.
Prior to the Effective Date, the Audit Committee consisted
of Messrs. Howe, Jacobson, Silverman and Walsh. The Audit
Committee met twice during the fiscal year ended November 1,
1997. The Audit Committee recommends to the Board of Directors
the independent public accountants to be selected to audit the
Company's annual financial statements and approves any special
assignments given to such accountants. The Audit Committee also
reviews the planned scope of the annual audit and the independent
accountants' letter of comments and management's responses
thereto, any major accounting changes made or contemplated and
the effectiveness and efficiency of the Company's internal
accounting procedures.
On the Effective Date, the Board of Directors elected
Kenneth Zimmerman (Chairman), Daniel Rubin and Harvey Silverman
to serve as members of the Audit Committee.
The Audit and Compensation Committees consist solely of
independent directors.
On the Effective Date, the Board of Directors elected Arnold
Amster, Burton Rosenberg and Daniel Rubin to serve as members of
the Office of the Chairman. The Office of the Chairman presides
at all meetings of the Board of Directors and has such powers and
will perform such duties as are from time to time appointed by
the Board of Directors.
During the fiscal year ended November 1, 1997, each of the
directors attended at least 75% of the aggregate number of the
meetings of the Board of Directors and the Committees of which
such director was a member (held during the period for which such
director served).
Section 16(a) of the Exchange Act requires the Company's
directors, executive officers and beneficial owners of more than
10% of the Common Stock to file reports of ownership and changes
of ownership with the Securities and Exchange Commission and the
New York Stock Exchange. The Company believes that during the
fiscal year ended November 1, 1997, all filing requirements
applicable to its directors, executive officers and beneficial
owners of more than ten percent of the Common Stock were complied
with.
EXECUTIVE OFFICERS
The following table sets forth certain information regarding
the executive officers of the Company:
Name Office or Positions Held
- ---------- ----------------------------------
Burton M. Rosenberg Chairman of the Board; Chief Executive
Officer; Member of the Office of the
Chairman
Milan Danek Managing Director, European Operations
Christine Hadjigeorge Treasurer; Chief Financial Officer
Stuart Jaeger Controller; Secretary
Roland L. Kimberlin President -- Manufacturing Operations
Robert F. Luehrs President
Stephen Weiner Executive Vice President, National Sales
Manager
For biographical information on Mr. Rosenberg, see 'Election
of Directors.'
Milan Danek is the Managing Director, European Operations of
the Company and was a director of the Company from 1993 until the
Effective Date. Mr. Danek has worked over 24 years at the Company
(during which time he has served as Managing Director of the
Company's German subsidiary) and has approximately 31 years of
industry experience. His previous industry experience includes
three years at Levi Strauss in Germany, where he was the
Marketing Director at the time of his departure, and seven years
with the exclusive distributor of Levi Strauss for southern
Germany and Austria.
Roland L. Kimberlin has served as an executive officer of
the Company for more than nine years, most recently as Vice
President and President -- Manufacturing Operations. Mr.
Kimberlin was a director of the Company from 1993 until the
Effective Date. Prior to joining the Company in 1966, Mr.
Kimberlin was employed by Ashland Oil and Refining Company, where
he held a number of positions, including regional bulk plant
manager.
Robert F. Luehrs has been an executive officer of the
Company for over 23 years, and has most recently served as Vice
President and President of the Company. Mr. Luehrs was a director
of the Company from 1993 until the Effective Date. Mr. Luehrs has
been employed by the Company for over 38 years and, prior to
assuming his current responsibilities, served in various
capacities, including sales representative and regional sales
manager. Mr. Luehrs has had approximately 41 years experience in
the apparel industry.
Christine Hadjigeorge, age 35, has been the Chief Financial
Officer and Treasurer of the Company since February 1997. Prior
to joining the Company, Ms. Hadjigeorge was a partner at BDO
Seidman, LLP, a public accounting firm, where she worked for over
twelve years. Ms. Hadjigeorge is a graduate of the College of
William & Mary and a certified public accountant in the state of
New York.
Stuart Jaeger, age 62, has been the Controller of the
Company since 1975 and its Secretary since 1988. Mr. Jaeger has
worked over 23 years with the Company. Prior to joining the
Company, Mr. Jaeger worked for 18 years as an accountant with
Brout & Company.
Stephen Weiner, age 47, has been the Executive Vice
President, National Sales Manager of the Company since 1986.
Prior responsibilities with the Company included serving as a
sales trainee, a salesman for the Northern New England States,
the Major New York Accounts Manager and the Sales Manager of
Chains and National Accounts. Mr. Weiner has been employed by the
Company for over 24 years.
Officers are chosen by the Board of Directors annually or at
such other time or times as the Board determines.
EXECUTIVE COMPENSATION
The following table sets forth the compensation awarded to,
earned by or paid to the Chief Executive Officer and the four
other most highly compensated executive officers during the
fiscal years ended November 1, 1997, November 2, 1996 and
November 4, 1995 for services rendered in all capacities to the
Company and its subsidiaries.
Summary Compensation Table (1)
Long-term
Compensation
Number of
Securities
Fiscal Underlying
Name and Principal Year Annual Compensation Options
Position Ended Salary ($) Bonus($) Granted (#)
Burton M. Rosenberg 11/1/97 416,467 40,000 0
Chairman of the Board;
Chief Executive 11/2/96 416,467 25,000 0
Officer; and Member of
the Office of the 11/4/95 403,846 0
Chairman
Robert F. Luehrs 11/1/97 320,006 40,000 0
President 11/2/96 328,512 25,000 0
11/4/95 342,324 0 10,000
Roland L. Kimberlin 11/1/97 360,965 40,000 0
President --
Manufacturing
Operations 11/2/96 360,965 25,000 0
11/4/95 362,833 0 10,000
Milan Danek 11/1/97 418,007 40,000 0
Managing Director,
European Operations 11/2/96 428,112 25,000 0
11/4/95 397,906 0 10,000
Stephen Weiner 11/1/97 312,048 35,973 0
Executive Vice
President, National
Sales 11/2/96 293,336 22,500 0
Manager 11/4/95 287,093 0 0
- ---------
(1) The column designated 'Other Annual Compensation' by the
Securities and Exchange Commission (the 'SEC') for the
reporting of perquisites and other personal benefits has
been eliminated because the amounts paid to each executive
officer do not exceed the disclosure threshold established
by the SEC pursuant to applicable rules, and no other
compensation required to be reported under that column was
awarded to, earned by or paid to any of the named executive
officers during the period covered by the table. In
addition, the columns designated by the SEC for the
reporting of certain long-term compensation, including
awards of restricted stock and long-term incentive plan
payouts, have been eliminated as no such awards have been
granted to date, nor have any such payouts been made during
the period covered by the table, and the column designated
'All Other Compensation' has been omitted as no compensation
required to be reported under such column was received.
Option Exercises/Value of Unexercised Options
The following table sets forth certain information
concerning unexercised options to purchase Common Stock of the
Company held at the end of fiscal year 1997 by the named
executive officers. None of the named executive officers
exercised any options during fiscal year 1997. No named executive
officer has been awarded stock appreciation rights.
Aggregated Option Exercises in Last
Fiscal Year and Fiscal Year-End Option Values
Number of
Securities Value of
Shares Underlying Unexercised
Acqui Unexercised In-the-Money
red Stock Stock Option
on Value at FY-end (#) at FY-end ($) (1)
Name Exer- Real- Exer Unexer Exer Unexer
cise ized ($) cisable cisable cisable cisable
Burton M.
Rosenberg 0 $0 30,000 0 $54,390 $0
Milan Danek 0 0 30,000 0 54,390 0
Roland L.
Kimberlin 0 0 30,000 0 54,390 0
Robert F.
Luehrs 0 0 30,000 0 54,390 0
Stephen Weiner 0 0 18,000 0 32,634 0
(1) Based upon the closing sale price of the Common Stock on
October 31, 1997 ($7.688) on the New York Stock Exchange
minus the option exercise price ($5.875).
Pension Plan
The following table sets forth the approximate annual
benefits payable upon retirement at age 65 (and upon at least
five years of service) under the Pension Plan for Eligible
Employees of Henry I. Siegel Co. (the 'Pension Plan') as a life
annuity, based on the average annual salaries and years of
service indicated.
Pension Plan Table
Years of Service Years of service
Average Annual 15 20 25 30 35
$ 10,000 $ 1,407 $ 1,678 $ 1,770 $ 1,864 $ 1,956
50,000 1,647 1,917 2,010 2,103 2,196
100,000 1,647 1,917 2,010 2,103 2,196
200,000 1,647 1,917 2,010 2,103 2,196
300,000 1,647 1,917 2,010 2,103 2,196
Compensation used to determine benefits generally includes a
participant's total earned income, wages, salaries and other
amounts received for services rendered to the Company or an
affiliate, excluding certain specified items such as Company
contributions to a deferred compensation plan and amounts
realized in connection with stock options or restricted stock.
Annual compensation taken into account under the Pension Plan is
limited to $14,000. Benefits are computed on a single life
annuity basis and are not subject to any offset for social
security. With respect to the following individuals named in the
Summary Compensation Table, the annual current covered
compensation under the plan is $14,000, which is substantially
less than the amount set forth under 'Salary' in the Summary
Compensation Table, and the estimated current credited years of
service are as follows:
Mr. Rosenberg 27 years
Mr.Danek 23 years
Mr. Kimberlin 30 years
Mr. Luehrs 37 years
Mr. Weiner 22 years
Certain Death Benefits
Upon recommendation of the Compensation Committee, in the
first quarter of fiscal 1994 the Board of Directors authorized
the Company to pay $5 million to the estate of Burton Rosenberg,
$2 million to the estate of Robert Luehrs, $2 million to the
estate of Roland Kimberlin, $2 million to the estate of Stephen
Weiner and $1 million to the estate of Milan Danek upon the death
of Mr. Rosenberg, Mr. Luehrs, Mr. Kimberlin, Mr. Weiner or Mr.
Danek, respectively, if (i) such executive is an employee of the
Company at the time of his death or (ii) retires in good standing
from the Company no earlier than the date on which such executive
reaches the age of 65 and (iii) if the Company at the time of the
death of such executive is the owner and beneficiary of insurance
on his life in the principal amount to be paid. In March, 1997,
the death benefit payable to the estate of Milan Danek was
increased to $2 million. The Company is authorized, but not
required, to maintain life insurance policies on the lives of
these executives naming the Company as beneficiary to support
this obligation, substantially all of which policies the Company
currently has in effect and the proceeds of which policies the
Company would intend to pay to the appropriate executive's estate
upon his death.
Employment Agreements
The Company entered into employment agreements with each of
Burton M. Rosenberg, Roland L. Kimberlin, Robert F. Luehrs and
Stephen Weiner (collectively, the 'Executive Employment
Agreements') effective as of March 15, 1996, as amended on March
17, 1997 and February 20, 1998. In March 1998, Messrs. Rosenberg,
Kimberlin, Luehrs and Weiner each agreed to rescind the February
20, 1998 amendments to their employment agreements and enter into
new amendments to their employment agreements. The following is a
summary of the material terms of the Executive Employment
Agreements, as amended. Each Executive Employment Agreement has
an initial term of five years and provides that upon the
expiration of the initial term, the initial term will be extended
automatically for successive one-year periods unless either party
gives at least 90 days' written notice of his or its intent not
to allow such extension to become effective. The Executive
Employment Agreements provide for annual salaries to Messrs.
Rosenberg, Kimberlin, Luehrs and Weiner of $393,750, $341,276,
$341,250 and $288,750, respectively, which may be increased on
each February 1 during the term of their Executive Employment
Agreements, at the discretion of the Board of Directors of the
Company. Each Executive Employment Agreement permits the Company
to terminate the employee's employment for cause (as defined
therein) or if the employee becomes permanently and seriously
disabled. If the employee is terminated without cause, such
employee would be entitled to receive a lump sum payment equal to
18 months base salary as severance. In the event that during the
term of the Executive Employment Agreements any of these
employees (with the exception of Stephen Weiner) becomes
permanently disabled, either physically or mentally, resulting in
an absence from the office for periods aggregating 120 business
days during any 12 month period, the Company shall pay such
employee a monthly benefit (the 'Disability Benefit') following
the employee's termination of employment on account of such
disability. The Disability Benefit payable shall be 100% of such
employee's monthly salary for the first 24 months of the
employee's disability and 50% of such employee's monthly salary
thereafter for the remainder of the employee's lifetime. The
Disability Benefit shall be reduced (but not below zero),
however, by an amount equal to the sum of (a) any other
disability payments received by the employee from the Company,
its subsidiary, Henry I. Siegel Company, or any insurance policy
of these entities, (b) two thirds of any earned income received
by the employee for full-time executive employment with any
entity commencing after the payment of a Disability Benefit
begins, and (c) any amount for which the employee is eligible
because of his disability under Federal social security laws or,
prior to age 65, under any Company or Harry I. Siegel Company
sponsored retirement plan. Each Executive Employment Agreement
also contains a covenant not to compete, whereby the employee
agrees that during the term of the agreement, and for up to one
year following the employee's termination of employment, the
employee will not, under certain circumstances, among other
things, engage in a business that is materially competitive with
any material business operated by the Company on the effective
date of the agreement.
Management Agreement
The Company's German subsidiary has entered into a
management agreement with Milan Danek effective as of January 13,
1997, as amended on March 10, 1997 (the 'Management Agreement').
The Management Agreement, which is subject to the laws of the
Federal Republic of Germany, has an initial term of five years
and provides that upon the expiration of the initial term, the
initial term will be extended automatically for successive
one-year periods unless either party gives at least six months'
written notice of his or its intent not to allow such extension
to become effective. The Management Agreement provides for an
annual salary to Mr. Danek in the amount of DM 606,000 ($351,480
based on the exchange rate for the deutsche mark on November 1,
1997), which may be increased from time to time at the discretion
of Supervisory Board of the Company's German subsidiary (the
'Supervisory Board'). Mr. Danek is also entitled to a Disability
Benefit under the same circumstances and on the same terms as
those of Messrs. Rosenberg, Kimberlin, and Luehrs. In addition,
Mr. Danek may receive an additional bonus at the sole discretion
of the Supervisory Board. The Management Agreement also contains
a covenant not to compete, whereby Mr. Danek agrees that during
the term of the Management Agreement, and for up to one year
following the expiration of the term, he will not compete with
the Company.
Compensation of Directors
Directors who are not officers of the Company receive an
annual fee of $12,000 for serving on the Board of Directors. No
annual fee is paid to any officer serving on the Board of
Directors. In addition, all directors (including officers serving
as directors) receive a fee of $500 for each meeting of the Board
of Directors or committee meeting attended, however, the officers
serving as directors have generally waived such fee.
The Company is a party to an Amended and Restated Consulting
Agreement, dated September 23, 1988, with Mr. Jesse S. Siegel
(the 'Consulting Agreement'). Mr. Siegel was a director of the
Company from February 1993 to the Effective Date and is a former
chief executive officer of a predecessor to the Company. Under
the Consulting Agreement, Mr. Siegel agreed to render consulting
services to the Company in the area of manufacturing, marketing
and selling women's apparel as the Company may from time to time
request. The Consulting Agreement which had an initial term of
ten years and could be extended, at the option of Mr. Siegel, for
up to four additional five-year terms, provided for an annual fee
of $500,000. Effective March 10, 1998, the Company reached an
agreement with Mr. Siegel to terminate the Consulting Agreement
as of such date. In consideration for such early termination, the
Company agreed to make a payment of $500,000 to Mr. Siegel.
Report of Compensation Committee on Executive Compensation
Compensation of executive officers of the Company is set at
levels which are intended to reflect competitive salary
practices. Each executive officer's compensation is based upon
both individual and Company performance. Compensation is
structured to provide incentives for executive officer
performance that results in improvements in the Company's
financial results and in total return to stockholders over both
the short term and the long term. The overall compensation plan
is also designed to align the interests of the Company's
executives and its stockholders by providing for payment of a
portion of the incentive compensation in the form of stock
options. Thus, the amount of value generated for the Company's
stockholders is a key factor in determining the full compensation
ultimately realized by the executive officers.
The compensation of the principal executive officers of the
Company consists of three principal parts: base salary, annual
bonus and stock options. Two of the three components are at risk
because the ultimate value of an officer's total compensation
depends on factors, subjectively assessed by the Committee, which
include the Company's financial performance, individual
performance and stock price.
Salary. Base salaries for the Company's executive officers
are fixed by employment agreements with the Company (see
'Employment Agreement' and 'Management Agreement'). Pursuant to
the terms of the Executive Employment Agreements, salaries are
reviewed in February of each year to determine whether an
increase is appropriate. Salaries were reviewed in February 1997.
The Committee has not yet decided whether it will recommend
salary adjustments in 1998. In view of the financial results of
the Company's last fiscal year, the Committee would expect prior
to making its decision to consider the individual performance of
each of the principal executives in light of all the
circumstances which had an impact on earnings.
Bonus. Messrs. Rosenberg, Kimberlin, Luehrs and Danek were
each awarded a discretionary bonus of $40,000 in fiscal 1997. The
Committee believes that each of these officers should be rewarded
because of the extraordinary demands placed on them in connection
with successfully relocating the Company's sewing operations and
effectively capitalizing on the savings achieved by such
relocation in marketing the Company's products. Although the
Company's earnings did not improve substantially in the last
fiscal year the Committee believes that this year's efforts and
the ongoing work necessary to complete the transition dictate
recognition by the bonus payment.
Stock Options. Each executive officer of the Company
participates in the Company's 1993 Stock Option Plan. The
Compensation Committee acts as the committee authorized to
administer the Stock Option Plan.
The Chief Executive Officer's employment agreement provides
for a fixed salary, the most important ingredient of his
compensation, which is not dependent upon or variable with
respect to either his or the Company's performance (although it
provides for salary increases, at the discretion of the Board of
Directors, in February of each year) (The Chief Executive
Officer's salary was not increased in February 1997). With
respect to the Chief Executive Officer, the Committee took into
account the same factors it considered in the case of the other
named executive officers in arriving at its decision to pay a
modest discretionary bonus for services rendered in fiscal 1997.
Section 162(m) of the Internal Revenue Code of 1986, as
amended (the 'Code'), which was enacted in 1993, precludes a
public company from taking a tax deduction for compensation in
excess of $1 million paid to its chief executive officer or any
of its other four highest-paid executive officers (with
exemptions for certain performance-based compensation). Based on
current compensation levels, it is not anticipated that any of
the named executive officers will receive compensation in excess
of $1 million in fiscal 1998. Therefore, the Committee currently
has no policy with respect to Section 162(m).
None of the members of the Committee is or was employed by
the Company. All are independent directors.
COMPENSATION COMMITTEE PRIOR TO THE EFFECTIVE DATE
Hirsh Jacobson
Harvey Silverman
Rica Spector
Edward J. Walsh, Jr.
Performance Graph
The following graph sets forth the Company's total
stockholder return as compared to the Standard & Poor's 500 Index
and the Standard and Poor's Textiles (Apparel Manufacturers)
Index for the period from February 18, 1993, when the Company's
Common Stock began trading on a when-issued basis on the New York
Stock Exchange, through November 1, 1997, the last day of the
Company's last completed fiscal year. The total stockholder
return assumes $100 invested at the beginning of the period in
the Company's Common Stock, the Standard & Poor's 500 Index and
the Standard and Poor's Textiles (Apparel Manufacturers) Index.
Comparison of Cumulative Total Return*
For Period From 2/18/93 through 11/1/97
Among Chic by H.I.S, Inc., the S&P 500 Index
and the S&P Textiles (Apparel Manufacturers) Index
Total Stockholder Returns
[GRAPH]
2/18/93 11/6/93 11/5/94 11/4/95 11/2/96 11/1/97
Chic
Common
Stock 100.00 84.78 95.65 53.26 39.13 65.03
S&P
Textiles
(Apparel
Manufact-
urers)
Index 100.00 108.65 112.43 147.05 179.19 204.09
S&P 500
Index 100.00 75.31 88.72 80.30 121.20 160.12
- ---------
* Total Return Assumes Reinvestment of Dividends.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Kenbarb Corp.
During the fiscal year ended November 1, 1997, Kenbarb
Corp., a Delaware corporation, owned approximately 3.7% of the
issued and outstanding Common Stock of the Company. All of
Kenbarb's outstanding capital stock was beneficially owned by
four officers of the Company: each of Mr. Burton M. Rosenberg,
Mr. Robert F. Luehrs and Mr. Roland L. Kimberlin beneficially
owned 30.1% of the issued and outstanding capital stock of
Kenbarb, and Mr. Harvey Schulman beneficially owned 9.7% of the
issued and outstanding stock of Kenbarb. In March 1998, Kenbarb
Corp. was liquidated and its holdings in the Company's Common
Stock were distributed to its shareholders based upon their
percentage ownership interest in Kenbarb Corp.
Tucker Anthony Incorporated
Prior to March 1996, Mr. Richard K. Howe, a director of the
Company, was a consultant to Tucker Anthony Incorporated ('Tucker
Anthony'), an investment banking firm, and prior to June 1992 was
an executive vice president and a director of Tucker Anthony. In
February 1996, Tucker Anthony acted as financial advisor for the
Company in connection with the Company's negotiation of certain
waivers of defaults and amendments to the agreements with the
holders of its senior notes and its bank lenders. In 1997, Tucker
Anthony acted as financial advisor for the Company in connection
with the adoption of a shareholder rights plan by the Company and
in connection with an initial public offering of a minority
interest in the Company's German subsidiary.
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
(Item 2)
The Board of Directors of the Company has appointed the firm
of BDO Seidman, LLP, independent auditors, to examine the
consolidated financial statements of the Company and its
subsidiaries for the fiscal year ending November 7, 1998, subject
to ratification by the stockholders.
BDO Seidman, LLP has served as the Company's independent
auditors since 1988.
A representative of BDO Seidman, LLP is expected to be
present at the Annual Meeting and to be provided with an
opportunity to make a statement if such person desires to do so
and to be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR
RATIFICATION OF THE APPOINTMENT OF BDO SEIDMAN, LLP AS THE
INDEPENDENT AUDITORS OF THE COMPANY'S CONSOLIDATED FINANCIAL
STATEMENTS FOR THE FISCAL YEAR ENDING NOVEMBER 7, 1998.
ANNUAL REPORT ON FORM 10-K; INCORPORATION BY REFERENCE
Copies of the Company's Annual Report on Form 10-K for the
fiscal year ended November 1, 1997 as filed with the Securities
and Exchange Commission are available without charge upon written
request addressed to Stockholder Relations, Chic by H.I.S, Inc.
at 1372 Broadway, New York, NY 10018.
To the extent this Proxy Statement has been or will be
specifically incorporated by reference into any filing by the
Company under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, the sections of the
Proxy Statement entitled 'Report of Compensation Committee on
Executive Compensation' and 'Performance Graph' shall not be
deemed to be so incorporated unless specifically otherwise
provided in any such filing.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING OF STOCKHOLDERS
Stockholders who wish to have their proposals considered for
inclusion in the proxy materials for the Company's Annual Meeting
of Stockholders to be held in 1999 must deliver such proposals in
writing to the Secretary of the Company at the Company's
principal executive offices no later than October 7, 1998.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of
Directors of the Company is not aware of any matters that will be
presented for action at the Annual Meeting other than those
described above. Should other business properly be brought before
the Annual Meeting, it is intended that the accompanying proxy
will be voted thereon in the discretion of the persons named as
proxies.
By Order of the Board of Directors
STUART JAEGER
Secretary
March 16, 1998
