SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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
PHILLIPS-VAN HEUSEN CORPORATION
(Name of Registrant as Specified in Its Charter)
PHILLIPS-VAN HEUSEN CORPORATION
(Name of Person 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:
COMMON STOCK, PAR VALUE $1.00
(2) Aggregate number of securities to which transaction applies:
N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
N/A
(4) Proposed maximum aggregate value of transaction:
N/A
|_| 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:
- --------------------------------------------------------------------------------
- ---------------------
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
Preliminary Copy
PHILLIPS-VAN HEUSEN CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of PHILLIPS-VAN HEUSEN CORPORATION
(the "Company"), a Delaware corporation, will be held at the offices of
Citibank, N.A., 399 Park Avenue, Twelfth Floor Auditorium, New York, New York,
on Tuesday, June 18, 1996, at 10:00 A.M., for the following purposes:
(1) To consider and act upon a proposal to amend the Company's
Certificate of Incorporation to establish one-year terms of
office for all members of the Company's Board of Directors in
lieu of its current classified system of directors (in which
the three classes of directors have staggered terms of office
and the directors in each class are elected for terms of
three years);
(2) In the event of the approval of the foregoing proposal to
amend the Company's Certificate of Incorporation, to elect
twelve directors of the Company to serve for a term of one
year, or, in the event of the disapproval of such proposal,
to elect four directors of the Company to serve for a term of
three years;
(3) To ratify the appointment of auditors for the Company to
serve until the next annual meeting of stockholders; and
(4) To consider and act upon such other matters as may properly
come before the meeting.
Only stockholders of record at the close of business on April 19, 1996
are entitled to vote at the meeting.
Attendance at the meeting will be limited to holders of record of the
Company's Common Stock or their proxies, beneficial owners having evidence of
ownership, and guests of the Company. If you hold stock through a bank or
broker, a copy of an account statement from your bank or broker as of the record
date will suffice as evidence of ownership.
You are requested to fill in, date and sign the enclosed proxy, which
is solicited by the Board of Directors of the Company, and to mail it promptly
in the enclosed envelope.
By order of the Board of Directors,
PAMELA N. HOOTKIN
Secretary
New York, New York
April 29, 1996
IMPORTANT: the prompt return of proxies will save the Company the expense of
further requests for proxies. A self-addressed envelope is enclosed for your
convenience. No postage is required if mailed within the United States.
Preliminary Copy
PHILLIPS-VAN HEUSEN CORPORATION
------------------------
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
June 18, 1996
------------------------
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of PHILLIPS-VAN HEUSEN CORPORATION (the
"Company") to be used at the Annual Meeting of Stockholders of the Company which
will be held at the offices of Citibank, N.A., 399 Park Avenue, Twelfth Floor
Auditorium, New York, New York, on Tuesday, June 18, 1996, at 10:00 A.M., and at
any adjournments thereof.
The principal executive offices of the Company are at 1290 Avenue of
the Americas, New York, New York 10104. The approximate date on which this Proxy
Statement and the enclosed form of proxy were first sent or given to
stockholders was April 29, 1996.
Stockholders who execute proxies retain the right to revoke them at any
time by notice in writing to the Secretary of the Company, by revocation in
person at the meeting or by presenting a later dated proxy. Unless so revoked,
the shares represented by proxies will be voted at the meeting. The shares
represented by the proxies solicited by the Board of Directors of the Company
will be voted in accordance with the directions given therein. Stockholders vote
at the meeting by casting ballots (in person or by proxy) which are tabulated by
a person who is appointed by the Board of Directors before the meeting to serve
as inspector of election at the meeting and who has executed and verified an
oath of office. Abstentions and broker "non-votes" are included in the
determination of the number of shares present at the meeting for quorum
purposes. Abstentions will have the same effect as negative votes, except that
abstentions will have no effect on the election of directors as directors are
elected by a plurality of the votes cast. Broker "non-votes" will have the same
effect as negative votes on the proposal to amend the Company's Certificate of
Incorporation because that proposal requires the approval of 80% of the
outstanding shares. Broker "non-votes" are not counted in the tabulations of the
votes cast on other proposals presented to stockholders because shares held by a
broker are not considered to be entitled to vote on matters as to which broker
authority is withheld. A broker "non-vote" occurs when a nominee holding shares
for a beneficial owner does not vote on a particular proposal because the
nominee does not have discretionary voting power with respect to that item and
has not received instructions from the beneficial owner.
Stockholders of record at the close of business on April 19, 1996 will
be entitled to one vote for each share of the Company's common stock (the
"Common Stock") then held. There were outstanding on such date _______ shares of
Common Stock. The Common Stock is the only outstanding class of voting stock of
the Company.
The rights to purchase shares of the Company's Series A Cumulative
Participating Preferred Stock, which automatically trade with the Common Stock,
do not vote. Such rights become exercisable, unless they theretofore have been
redeemed or have expired, 10 days after a person or affiliated or associated
group acquires 20% or more of the Common Stock in a transaction not previously
approved by the Company's Board of Directors or commences a tender offer for 30%
or more of the Common Stock.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table presents certain information with respect to the
persons who are known to the Company to be the beneficial owners of more than
five percent of the Common Stock as of April 19, 1996. Except as otherwise
indicated, the persons listed below have advised the Company that they have sole
voting and investment power with respect to the shares listed as owned by them.
<TABLE>
<CAPTION>
Amount
Name and Address of Beneficially Percent of
Beneficial Owner Owned Class
- ------------------- ------------ ----------
<S> <C> <C>
Vaneton International, Inc.1 2,835,794
P.O. Box 3340
Road Town
Tortola, British Virgin Islands
The Crabbe Huson Special Fund, Inc.2 2,162,400
121 SW Morrison
Suite 1400
Portland, Oregon 97204
BAT Industries p.l.c.3 1,653,900
Windsor House
50 Victoria Street
London SW1H ONL
England
Merrill Lynch & Co., Inc.4 1,585,105
World Financial Center
250 Vesey Street
New York, New York 10281
The Capital Group Companies, Inc.5 1,410,000
333 South Hope Street
Los Angeles, California 90071
The Phillips-Van Heusen Corporation6 1,401,647
Associates Investment Plan
1290 Avenue of the Americas
New York, New York 10104
</TABLE>
- ---------------
1 Dr. Richard Lee, 6/F TAL Building, 49 Austin Road, Kowloon, Hong Kong,
may be deemed to beneficially own the 2,835,794 shares of Common Stock owned of
record by Vaneton International, Inc. Mr. Lee and Vaneton International, Inc.
have shared voting and dispositive power over such shares. Information as to the
shares of Common Stock beneficially owned by Vaneton International, Inc. and Mr.
Lee is as of March 22, 1995 and as set forth in a Schedule 13D filed with the
Securities and Exchange Commission.
2 The Crabbe Huson Special Fund, Inc. ("CHSF"), 121 SW Morrison, Suite
1400, Portland, Oregon 97204, is a registered investment company which, as of
December 31, 1995, owned 1,674,100 shares (_____%) of Common Stock. The Crabbe
Huson Group, Inc. ("CHG"), 121 SW Morrison, Suite 1400, Portland, Oregon 97204,
is a registered investment adviser which, as of December 31, 1995, shares voting
and dispositive power with CHSF, for which it serves as
(Footnotes continued on following page)
(Footnotes continued from preceding page)
investment advisor, with respect to the 1,674,100 shares of Common
Stock owned by CHSF and with respect to 488,300 shares (____%) of
Common Stock owned by approximately twelve investors for which it
serves as investment advisor. CHSF and CHG may be deemed to have formed
a "group" within the meaning of the Securities Exchange Act of 1934
(the "Exchange Act") and accordingly, the group beneficially owns the
2,162,400 shares (____%) of Common Stock. Each of CHSF and CHG
disclaims beneficial ownership of all shares owned by the other.
Information as to the shares of Common Stock owned by CHSF and CHG is
as of December 31, 1995 and as set forth in a Schedule 13G filed with
the Securities and Exchange Commission.
3 BAT Industries p.l.c. ("BAT"), Windsor House, 50 Victoria Street,
London SW1H ONL, England, is the parent company of South Western
Nominees Limited, Windsor House, 50 Victoria Street, London SW1H ONL,
England, which is the parent company of Farmers Group, Inc.
("Farmers"), 4680 Wilshire Boulevard, Los Angeles, California 90010. As
such, BAT may be deemed to be the beneficial owner of an aggregate
1,653,900 shares (____%) of Common Stock which may be deemed to be
beneficially owned by Farmers.
Farmers is an insurance company and may be deemed to be the beneficial
owner of shares of Common Stock as a result of (i) acquisitions made by
various subsidiaries of Farmers, (ii) insurance exchanges for which
Farmers acts as attorney-in-fact and (iii) benefit plans for employees
of Farmers or its subsidiaries for which Farmers has investment
discretion. No such entity is the beneficial owner of more than 5% of
the Common Stock.
Information as to the shares of Common Stock beneficially owned by BAT
and Farmers is as of December 31, 1995 and as set forth in a Schedule
13G filed with the Securities and Exchange Commission.
4 Merrill Lynch & Co., Inc. ("MLC"), World Financial Center, North Tower,
250 Vesey Street, New York, New York 10281, is the parent company of
(i) Merrill Lynch Global Asset Management Limited ("MLGAM"), World
Financial Center, North Tower, 250 Vesey Street, New York, New York
10281, and (ii) Merrill Lynch Group, Inc. ("MLG"), World Financial
Center, North Tower, 250 Vesey Street, New York, New York 10281. As
such, MLC may be deemed to be the beneficial owner of an aggregate
1,585,105 shares (____%) of Common Stock which may be deemed to be
beneficially owned by MLGAM and MLG.
MLG may be deemed to be the beneficial owner of 1,585,105 shares
(____%) of Common Stock by virtue of its control of its wholly-owned
subsidiary, Princeton Services, Inc. ("PSI"), 800 Scudders Mill Road,
Plainsboro, New Jersey 08536, and of Merrill Lynch Bank (Suisse) S.A.
("Bank Suisse") and various Merrill Lynch Trust Companies, each of
which is a wholly-owned subsidiary of MLG. PSI is the general partner
of Merrill Lynch Asset Management, L.P. ("MLAM"). MLAM, 800 Scudders
Mill Road, Plainsboro, New Jersey 08536, is a registered investment
advisor which may be deemed to be the beneficial owner of 1,357,940
shares (___%) of Common Stock.
Each of MLC, MLGAM, MLG, PSI, Bank Suisse, the Merrill Lynch Trust
Companies and MLAM has disclaimed beneficial ownership of such shares.
Information as to the shares of Common Stock beneficially owned by MLC,
MLG, PSI and MLAM is as of December 31, 1995 and as set forth in a
Schedule 13G filed with the Securities and Exchange Commission.
(Footnotes continued on following page)
(Footnotes continued from preceding page)
5 The Capital Group Companies, Inc. ("CGC") is the parent company of
Capital Research and Management Company ("CRMC"), 333 South Hope
Street, Los Angeles, California 90071. CRMC is a registered investment
adviser which, as of December 31, 1994, exercised investment discretion
with respect to 1,410,000 shares (____%) of the Common Stock, which
were owned by various institutional investors. CRMC and, therefore, CGC
has no power to direct the vote of such shares. CGC has disclaimed
beneficial ownership of such shares. Information as to the shares of
Common Stock beneficially owned by CGC and CRMC is as of December 31,
1994 and as set forth in a Schedule 13G filed with the Securities and
Exchange Commission.
6 Includes all shares held by the Master Trust relating to the Company's
Associates Investment Plan, its Associates Investment Plan (Crystal
Brands Division) and its Associates Investment Plan for Associates in
Puerto Rico. The Master Trust does not have dispositive power as to the
shares of Common Stock beneficially owned by it.
The following table presents certain information with respect to the
number of shares of Common Stock beneficially owned by each of the directors and
nominees for director of the Company, the chief executive officer, the four most
highly compensated executive officers of the Company other than the chief
executive officer, and all of the directors, nominees for director and executive
officers of the Company as a group as of April 19, 1996.
<TABLE>
<CAPTION>
Amount
Beneficially Percent of
Name Owned(1) Class
- ---- ------- -----
<S> <C> <C>
Edward H. Cohen 13,762 *
Estelle Ellis 14,762 *
Joseph B. Fuller 3,262 *
Bruce J. Klatsky 179,076 *
Maria Elena Lagomasino 727 *
Harry N.S. Lee(2) 1,000 *
Bruce Maggin 27,262 *
Ellis E. Meredith 12,772 *
Steven L. Osterweis 17,762 *
Walter T. Rossi 17,166 *
William S. Scolnick 8,262 *
Allen E. Sirkin 30,311 *
Peter J. Solomon 31,762 *
Mark Weber 43,686 *
Irwin W. Winter 56,303 *
All directors, nominees for director and
executive officers as a group (15 persons) 457,875 __%
</TABLE>
- ------------------------
* Less than 1% of class.
1 The figures in the table are based on information furnished to the
Company by the directors, nominees for director and executive officers.
The figures do not include the shares held in the Master Trust for the
executive officers by virtue of their participation in the Company's
Associates Investment Plan. See the prior table for information
regarding the Associates Investment Plan. Except as otherwise
indicated, each of the directors, nominees and executive officers has
sole voting and investment power with respect to the shares listed as
owned by them.
2 Harry N.S. Lee is a director of Vaneton International, Inc. which
beneficially owns 2,835,794 shares (___%) of Common Stock. See the
prior table for certain information regarding Vaneton International,
Inc.
The figures in the foregoing table include 190 shares held by Bruce J.
Klatsky's child and by Mr. Klatsky's wife as custodian for his child, as to
which Mr. Klatsky has disclaimed beneficial ownership, 8,000 shares held by
Bruce Maggin as custodian for his children, 300 shares held by Allen E. Sirkin
with his wife as joint tenants, 200 shares held by Mr. Sirkin's wife's Keogh
Plan, as to which Mr. Sirkin has disclaimed beneficial ownership, 100 shares
held by Mr. Sirkin's wife as custodian for one of Mr. Sirkin's children, as to
which Mr. Sirkin has disclaimed beneficial ownership, and 12,000 shares held in
certain trusts for the benefit of the children of Peter J. Solomon, as to which
Mr. Solomon has disclaimed beneficial ownership.
The foregoing table also includes shares which the following directors
and executive officers have the right to acquire within sixty days upon the
exercise of options granted under the Company's stock option plans: Edward H.
Cohen, 7,762 shares; Estelle Ellis, 7,762 shares; Joseph B. Fuller, 2,762
shares; Bruce J. Klatsky, 130,408 shares; Maria Elena Lagomasino, 527 shares;
Bruce Maggin, 7,762 shares; Ellis E. Meredith, 7,762 shares; Steven L.
Osterweis, 7,762 shares; Walter T. Rossi, 16,666 shares; William S. Scolnick,
7,762 shares; Allen E. Sirkin, 30,011 shares; Peter J. Solomon, 7,762 shares;
Mark Weber, 36,186 shares; Irwin W. Winter, 34,278 shares; and all directors,
nominees for director and executive officers as a group, including the
foregoing, 305,172 shares.
ELECTION OF DIRECTORS
The Board of Directors currently consists of 12 members and is divided
into three classes. One class of directors is elected by the stockholders at
each annual meeting to serve for a term of three years or until their successors
are elected and qualified. However, the Board of Directors has submitted for
stockholder approval a proposal to amend the Company's Certificate of
Incorporation to eliminate the classification of the Board of Directors and the
election of the classes of directors on a staggered basis and to provide for the
annual election of all members of the Board for a term of one year or until
their successors are elected and qualified. See "Approval of an Amendment to the
Company's Certificate of Incorporation to Establish Annual Terms for Members of
the Board of Directors."
At the meeting, the stockholders will, in the event of the approval of
the proposal to amend the Company's Certificate of Incorporation, elect 12
members of the Board of Directors to serve until the 1997 Annual Meeting of
Stockholders and until their respective successors shall have been elected and
shall qualify or, in the event the proposal to amend the Company's Certificate
of Incorporation is not approved, elect four directors to serve for a term of
three years and until their respective successors shall have been elected and
shall qualify.
In order to effect the foregoing, the eight directors whose terms would
not normally expire at the meeting have tendered their resignations, effective
only upon the passing of the proposal to amend the Company's Certificate of
Incorporation. If the proposal to amend the Company's Certificate of
Incorporation receives the requisite approval at the meeting, it is proposed
that the twelve current directors of the Company be re-elected to serve on the
Company's Board of Directors, each for a term of one year and until their
respective successors shall have been elected and shall qualify. If the proposal
to amend the Company's Certificate of Incorporation does not receive the
requisite approval at the meeting, the eight directors whose terms would not
normally expire at the meeting will serve out the balance of their respective
three-year terms and it is proposed that the four directors whose terms of
office expire at the meeting be re-elected to serve on the Company's Board of
Directors, each for a term of three years and until their respective successors
shall have been elected and shall qualify.
The election of directors requires the affirmative vote of a plurality
of the shares of Common Stock present in person or by proxy at the meeting. At
this time, the Board of Directors knows of no reason why any nominee might be
unable to serve. There are no arrangements or understandings between any
director or nominee and any other person pursuant to which such person was
selected as a director or nominee.
The Board of Directors recommends a vote, if the proposal to amend the
Company's Certificate of Incorporation is approved, FOR the election of the 12
nominees named below and, if the proposal to amend the Certificate of
Incorporation is not approved, FOR the four Class C nominees named below.
Proxies received in response to this solicitation will be voted FOR the election
of the nominees in all events unless otherwise specified in the proxy.
The following individuals are the Company's directors whose terms of
office expire at the meeting in all events. All of these individuals have
previously been elected directors of the Company by the stockholders.
<TABLE>
<CAPTION>
Year
Became a
Principal Occupation Age Director
-------------------- --- ---------
<S> <C> <C> <C>
Class C (Term Expires 1999)
Joseph B. Fuller Director of Monitor Company, a 39 1991
management consulting firm
Bruce J. Klatsky Chairman, President and Chief Executive 47 1985
Officer of the Company
Bruce Maggin Executive Vice President, Multimedia 53 1987
Group, Capital Cities/ABC, Inc.
Steven L. Osterweis Business consultant 83 1976
</TABLE>
The following individuals are the Company's other directors whose terms
of office will expire at the annual meeting if the proposal to amend the
Company's Certificate of Incorporation is approved, but whose terms of office
will continue after the meeting and until the annual meeting of stockholders in
the year in which the directorships of their class terminate if the proposal to
amend the Company's Certificate of Incorporation does not receive the requisite
approval at the meeting. With the exception of Harry N.S. Lee, who was elected
by the directors on April 18, 1995, all of these individuals have previously
been elected directors of the Company by the stockholders.
<TABLE>
<CAPTION>
Year
Became a
Principal Occupation Age Director
-------------------- --- ---------
<S> <C> <C> <C>
Class B (Term Expires 1998)
Edward H. Cohen Senior Partner of Rosenman & Colin 57 1987
LLP
Estelle Ellis President of Business Image, Inc., a 76 1982
creative marketing company
Maria Elena Senior Vice President of The Chase 47 1993
Lagomasino Manhattan Bank, N.A.
William S. Scolnick Retired Executive Vice President of a 78 1962
division of the Company
</TABLE>
<TABLE>
<CAPTION>
Year
Became a
Principal Occupation Age Director
-------------------- --- ---------
<S> <C> <C> <C>
Class A (Term Expires 1997)
Harry N.S. Lee Director of TAL Apparel Limited, an 53 1995
apparel manufacturer and exporter based
in Hong Kong
Ellis E. Meredith Chairman of Newsletters, Inc., a 68 1984
publisher of business newsletters
Peter J. Solomon Chairman of Peter J. Solomon Company, 57 1987
Ltd., an investment banking firm
Irwin W. Winter Executive Vice President and Chief 62 1987
Financial Officer of the Company
</TABLE>
Mr. Klatsky is also a director of MEM Company, Inc. Mr. Cohen is also a
director of Franklin Electronic Publishers, Inc. Mr. Solomon is also a director
of Centennial Cellular Corp., Century Communications Corporation, Culbro
Corporation, Monro Muffler Brake, Inc. and Office Depot, Inc.
Each of the directors or nominees for director has been engaged in the
principal occupation indicated in the foregoing table for more than the past
five years, except Mr. Klatsky who, while serving as President of the Company
for more than the past five years, was elected the Company's Chief Executive
Officer in June 1993 and Chairman of the Board in June 1994.
No family relationship exists between any director or executive officer
of the Company.
The Board of Directors of the Company has standing Audit and
Compensation Committees; it does not have a standing Nominating Committee. The
Audit Committee, composed of Messrs. Maggin, Osterweis and Scolnick, is charged
with recommending annually to the Board of Directors the independent auditors to
be retained by the Company, reviewing the audit plan with the auditors,
reviewing the results of the audit with the officers of the Company and its
auditors and reviewing with the officers and internal auditors of the Company
the scope and nature of the Company's internal audit function. The Audit
Committee held three meetings during the fiscal year ended January 28, 1996. The
Compensation Committee, composed of Messrs. Cohen, Maggin, Meredith and
Osterweis, is charged with setting the compensation of all executive officers,
recommending new incentive compensation plans and implementing changes and
improvements to existing incentive compensation plans, all subject to approval
by the Board of Directors. The Compensation Committee held three meetings during
the fiscal year ended January 28, 1996.
During the fiscal year ended January 28, 1996, there were five meetings
of the Board of Directors. All of the directors attended at least 75% of the
aggregate number of meetings of the Board of Directors and the Committees of the
Board of Directors on which they serve, except for Mr. Solomon who attended
three of the five (60%) meetings of the Board of Directors.
The Company will consider for election to the Board of Directors a
nominee recommended by a stockholder if the recommendation is made in writing
and includes (i) the qualifications of the proposed nominee to serve on the
Board of Directors, (ii) the principal occupations and employment of the
proposed nominee during the past five years, (iii) each directorship currently
held by the proposed nominee and (iv) a statement that the proposed nominee has
consented to the nomination. The recommendation should be addressed to the
Secretary of the Company.
Based upon a review of the filings furnished to the Company pursuant to
Rule 16a-3(e) promulgated under the Exchange Act and on representations from
its executive officers and directors, all filing requirements of Section 16(a)
of the Exchange Act were complied with during the fiscal year ended January 28,
1996, except that one report covering one transaction was filed late by Mr.
Winter.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes all plan and non-plan compensation
awarded to, earned by, or paid to the Company's chief executive officer and its
four most highly compensated executive officers, other than the chief executive
officer, who were serving as executive officers at the end of the Company's last
fiscal year (together, the "Named Executive Officers"), for services rendered in
all capacities to the Company and its subsidiaries for each of the Company's
last three fiscal years, ended January 28, 1996, January 29, 1995 and January
30, 1994 ("fiscal" 1995, 1994 and 1993, respectively).
<TABLE>
<CAPTION>
Long-Term All Other
Compensation Compensation1
------------ -------------
Annual
Compensation
---------------------
Awards2
-------
Name and Salary Bonus Options3
Principal Position Year $ $ # $
- ------------------ ---- ------- ------ ---------- -------------
<S> <C> <C> <C> <C> <C>
Bruce J. Klatsky 1995 816,666 --- 20,000 56,427
Chairman, 1994 750,000 --- 7,890 93,977
Phillips-Van Heusen Corporation 1993 750,000 835,000 215,520 2,281,983
Walter T. Rossi4 1995 633,333 --- 15,000 24,093
Chairman, 1994 575,000 --- 5,260 21,095
The PVH Retail Group 1993 500,000 --- 8,620 10,733
Allen E. Sirkin5 1995 633,333 --- 15,000 24,093
Chairman 1994 575,000 --- 5,260 25,627
The PVH Wholesale Group 1993 500,000 --- 8,620 45,572
Mark Weber6 1995 491,666 --- 7,500 19,763
Vice President, 1994 462,500 --- 4,170 22,252
Phillips-Van Heusen Corporation and 1993 425,000 --- 7,340 22,233
Group President, The Sportswear
Group
Irwin W. Winter7 1995 491,666 --- 15,000 19,843
Vice President, Finance, 1994 456,250 --- 5,000 17,533
Phillips-Van Heusen Corporation 1993 395,833 --- 8,280 16,467
</TABLE>
No other annual compensation, restricted stock awards, stock
appreciation rights ("SARs") or long-term incentive plan ("LTIP") payouts (all
as defined in the proxy regulations of the Securities and Exchange Commission)
were awarded to, earned by, or paid to the Named Executive Officers during any
of the Company's last three fiscal years.
- ---------------
1 All Other Compensation includes payments or contributions required by
the Company's Associates Investment Plan and Supplemental Savings Plan,
Corporate Medical Reimbursement Insurance Plan and Educational Benefit
Trust and payments made pursuant to an agreement between the Company
and Mr. Klatsky (the "Klatsky Employment Agreement").
Under the combination of the Company's Associates Investment Plan, its
Associates Investment Plan (Crystal Brands Division) and its Associates
Investment Plan for Associates in Puerto Rico, each employee, including
the Named Executive Officers, eligible to participate may currently
(Footnotes continued on following page)
(Footnotes continued from preceding page)
authorize his or her employer to withhold a specified percentage of his
or her compensation, up to 6% in the case of certain management and
highly compensated employees, including the Named Executive Officers,
and otherwise up to 15% (subject to certain limitations). Under the
Supplemental Savings Plan applicable to certain management and highly
compensated employees, each employee, including the Named Executive
Officers, eligible to participate may currently authorize his or her
employer to withhold a specified percentage of his or her compensation,
up to 15% after deductions for contributions to the Company's
Associates Investment Plans. The Company or its subsidiaries will
contribute an amount equal to 50% of an employee's contribution up to a
maximum of 3% of such employee's total compensation.
The entire amount contributed by the Company will be invested in Common
Stock and the amount contributed by the employee will be invested, in
the employee's sole direction, in up to six investment funds (including
up to 25% in additional Common Stock), except that, in the case of the
Supplemental Savings Plan, the Company's contribution will be in the
form of phantom shares of Common Stock and the employee's contribution
will earn interest at the same rate as is paid on 10-year United States
Treasury bonds, except for certain employee contributions made prior to
July 1, 1995 which were invested in the form of phantom shares of
Common Stock. A participant's interest in the amounts arising out of
employer contributions vests after the earlier of five years, at age 65
or upon disability or death. The Company has made contributions which
are reflected under this column in the amount of $24,500, $22,500 and
$22,500 for Bruce J. Klatsky, $19,000, $17,250 and $1,250 for
Walter T. Rossi, $19,000, $17,250 and $15,000 for Allen E. Sirkin,
$14,670, $13,875 and $12,750 for Mark Weber, and $14,750, $13,688 and
$10,875 for Irwin W. Winter, in the fiscal year ended January 28, 1996,
January 29, 1995 and January 30, 1994, respectively.
The Company's Corporate Medical Reimbursement Plan covers eligible
employees for most medical charges up to a specified annual maximum.
During the fiscal years ended January 28, 1996, January 29, 1995 and
January 30, 1994, respectively, the Company incurred the following
annual premiums for single or family coverage for the Named Executive
Officers which are reflected under this column: Bruce J.
Klatsky--$5,093, $8,377 and $9,483; Walter T. Rossi--$5,093, $3,845
and $9,483; Allen E. Sirkin--$5,093, $8,377 and $9,483; Mark
Weber--$5,093, $8,377 and $9,483; and Irwin W. Winter--$5,093, $3,845
and $5,592.
Under the Company's Educational Benefit Trust, children of eligible
employees received reimbursement of tuition and room and board charges
while attending an accredited college or vocational school. The plan
was terminated in 1986 except with respect to children who were then
covered by the plan. The education benefits received by children who
continue to be eligible to receive benefits under the plan and which
are reflected under this column totalled $26,834, $26,100 and $21,089,
for the fiscal years ended January 28, 1996, January 29, 1995 and
January 30, 1994, respectively. Such benefits were paid to the child of
Bruce J. Klatsky for the fiscal years ended January 28, 1996 and
January 29, 1995 and to the children of Allen E. Sirkin for the fiscal
year ended January 30, 1994.
Pursuant to the Klatsky Employment Agreement, the Company transferred
(subject to certain restrictions) $2,250,000 of government securities
to Mr. Klatsky and reimbursed Mr. Klatsky for $37,000 in legal expenses
relating to the negotiation of said agreement. See "Employment
Contracts, Termination of Employment and Change-In-Control
Arrangements."
(Footnotes continued on following page)
(Footnotes continued from preceding page)
2 The stockholders approved the Company's Performance Restricted Stock
Plan (the "Performance Restricted Stock Plan") at the 1995 Annual
Meeting of Stockholders. Under the Performance Restricted Stock Plan,
certain of the Company's senior executives are eligible to receive
restricted shares of the Common Stock if the Company achieves the
financial goals for a given fiscal year set by the Compensation
Committee at the beginning of such fiscal year. For the fiscal year
ended January 28, 1996, no awards were made under the Performance
Restricted Stock Plan because the Company failed to attain the goals
set by the Compensation Committee at the beginning of such fiscal year.
See "Compensation Committee Report on Executive Compensation" for a
more detailed description of the Performance Restricted Stock Plan.
3 In response to changes in the tax laws as a result of the Omnibus
Budget Reconciliation Act of 1993 (the "1993 Tax Act"), on September 9,
1993, the Named Executive Officers agreed to cancel the options which
had been issued to them on June 1, 1993, in consideration of the grant
of new options for the same number of shares at a price equal to the
option price of the original options, which price was higher than the
market price on such date. Also in response to the 1993 Tax Act
changes, at the Company's urging and for its benefit, on December 1, 2
and 3, 1993, Mr. Klatsky exercised the option granted to him on April
28, 1993 to purchase 100,000 shares, in consideration of the grant to
him of a new option on December 3, 1993 for 100,000 shares at the then
fair market value of the Common Stock for the balance of the term of
his original option. Both the original grants which were cancelled and
the new grants are reflected in the 1993 option grants under this
column.
4 Mr. Rossi resigned as an executive officer of the Company on February
12, 1996.
5 Mr. Sirkin was promoted to Vice Chairman of the Company on January 29,
1996.
6 Mr. Weber was promoted to Vice Chairman of the Company on January 29,
1996.
7 Mr. Winter was promoted to Executive Vice President and Chief Financial
Officer of the Company on January 29, 1996.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information with respect to grants of
stock options to purchase Common Stock pursuant to the Company's 1987 Stock
Option Plan (the "Option Plan") granted to the Named Executive Officers during
the fiscal year ended January 28, 1996. No stock appreciation rights have been
granted by the Company.
<TABLE>
<CAPTION>
Individual Grants
---------------------------------------------------------------------------------------------------------
Percent of Potential Realizable
Total Value at Assumed
Options Annual Rates of Stock
Granted to Price Appreciation For Option Term
Options Employees Exercise Expira- -----------------------------------
Granted1 in Fiscal Price tion 5% 10%
Name # Year $/sh Date $ $
- ---- ---------- --------- --------- ------- ----------- -------
<S> <C> <C> <C> <C> <C> <C>
Bruce J. Klatsky 20,000 4.3 $14.75 6/13/05 185,524 470,154
Walter T. Rossi 15,000 3.2 $14.75 6/13/05 139,143 352,615
Allen E. Sirkin 15,000 3.2 $14.75 6/13/05 139,143 352,615
Mark Weber 7,500 1.6 $14.75 6/13/05 69,571 176,308
Irwin W. Winter 15,000 3.2 $14.75 6/13/05 139,143 352,615
All stockholders2 N/A N/A N/A N/A 249,582,934 632,481,305
- ------------------------
</TABLE>
1 All options granted to the Named Executive Officers in the fiscal year
ended January 28, 1996 were granted on June 13, 1995. One third of the
outstanding options become exercisable on each of the third, fourth and
fifth anniversaries of the grant date.
2 These figures were calculated assuming that the price of the 26,679,095
shares of Common Stock outstanding on June 13, 1995 increased from
$14.875 per share at a compound rate of 5% and 10% per year for ten
years. The purpose of including this information is to indicate the
potential realizable value at the assumed annual rates of stock price
appreciation for the option term for all of the Company's stockholders.
FISCAL YEAR-END OPTION VALUES
The following table sets forth information with respect to the value at
January 28, 1996 of unexercised stock options held by the Named Executive
Officers. No stock appreciation rights have been granted by the Company and no
stock options were exercised during the fiscal year ended January 28, 1996 by
the Named Executive Officers.
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised Options In-The-Money at
Options at Fiscal Year-End Fiscal Year-End1
----------------------------------- -----------------------------------
Exercisable/Unexercisable Exercisable/Unexercisable
Name # $
- ---- ----------------------------------- -----------------------------------
<S> <C> <C> <C> <C>
Bruce J. Klatsky 27,460 138,598 32,352 0
Walter T. Rossi 8,333 41,237 0 0
Allen E. Sirkin 28,373 26,208 59,321 0
Mark Weber 35,039 16,487 112,244 0
Irwin W. Winter 32,557 25,861 59,927 0
</TABLE>
- ------------------------
1 Fair market value of securities underlying the options minus the
exercise price of the options at exercise or fiscal year-end.
PENSION PLAN TABLE
The following table sets forth the aggregate estimated annual benefits
payable, upon retirement at age 65, to employees under the combination of the
pension plan for salaried employees and a supplemental defined benefit plan,
applicable to certain management and highly compensated employees (including the
Named Executive Officers), in various compensation and years-of-service
classifications, assuming that the Social Security maximum limit does not change
from its present level of $62,700.
Years of Service
Remuneration ----------------------------------------
$ 15 20 25 30 35
------------ -- -- -- -- --
175,000 34,989 46,110 57,051 67,884 78,669
275,000 57,489 76,110 94,551 112,884 131,169
375,000 79,989 106,110 132,051 157,884 183,669
475,000 102,489 136,110 169,551 202,884 236,169
575,000 124,989 166,110 207,051 247,884 288,669
675,000 147,489 196,110 244,551 292,884 341,169
775,000 169,989 226,110 282,051 337,884 393,669
The benefits under the Company's pension plans are generally based on a
participant's career average compensation (except that pre-1994 benefits are
based on pre-1994 high five-year average compensation and exclude bonuses).
Absent any election by a participant of an optional form of benefit, benefits
under the pension plans become payable at the time of retirement, normally at
age 65; such benefits under the pension plans for salaried employees are payable
monthly for the life of the participant and, in most cases, for the life of such
participant's surviving spouse and benefits under the supplemental defined
benefit plan are payable in a lump sum. Notwithstanding the method of payment of
benefits under the pension plans, the amounts shown in the above table are shown
in the actuarial equivalent amount of a life annuity. The benefits listed above
are not subject to any deduction for social security or other offset amounts.
The credited years of service and covered compensation under the
pension plans, as of January 28, 1996, for each of the Named Executive Officers
is set forth in the following table.
Credited Years
Name of Service
---------------- --------------
Bruce J. Klatsky 23
Walter T. Rossi 2
Allen E. Sirkin 9
Mark Weber 24
Irwin W. Winter 8
COMPENSATION OF DIRECTORS
Each director of the Company who is not an employee of the Company or
any of its subsidiaries receives a fee of $10,000 for his or her services as a
director of the Company and $750 for each Board meeting attended. Each director
who is a member of the Audit Committee receives an additional fee of $2,500;
each director who is a member of the Compensation Committee receives an
additional fee of $2,500. Pursuant to the Option Plan, each outside director is
entitled to receive, on an annual basis, a non-incentive option to purchase the
number of shares of Common Stock derived by dividing $50,000 by the fair market
value of a share of Common Stock on the date of grant. Pursuant to the Option
Plan, on June 13, 1995, each outside director was granted an option to purchase
3,389 shares of Common Stock.
The law firm of Rosenman & Colin LLP, of which Mr. Cohen is a senior
partner, was engaged as the Company's general outside counsel for the fiscal
year ended January 28, 1996 and will continue to be so engaged for the fiscal
year ending February 2, 1997.
Peter J. Solomon Company, Ltd., of which Mr. Solomon is Chairman,
provides investment banking services to the Company.
Business Image, Inc., of which Ms. Ellis is President, provides
marketing and communications services to the Company, including the publication
of a corporate newsletter. During the fiscal year ended January 28, 1996,
Business Image, Inc. was paid $202,186 for its services to the Company.
Monitor Company, of which Mr. Fuller is a director, provided business
consulting services to the Company during the fiscal year ended January 28,
1996.
TAL Apparel Limited, of which Mr. Lee is a director, has been, and
continues to be, one of the principal manufacturers of the Company's apparel
products. During the fiscal year ended January 28, 1996, the Company purchased
approximately $45,000,000 of products from TAL Apparel Limited and certain
related companies.
EMPLOYMENT CONTRACTS, TERMINATION OF
EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
Pursuant to the Klatsky Employment Agreement, the Company transferred
(subject to certain restrictions) $2,250,000 of government securities to Bruce
J. Klatsky, the Company's Chairman and Chief Executive Officer. Under the
agreement, $83,333 of such securities were released to Mr. Klatsky at the end of
each month commencing February 1994 and ending April 1996.
The Company has had in effect since 1987 a Special Severance Benefit
Plan providing benefits for 20 key employees of the Company and its
subsidiaries, including the Named Executive Officers. Upon the termination of
employment by any participant within two years after a change in control of the
Company (as defined in the Plan), the participant receives a lump sum payment in
an amount generally equal to three times the average annual total cash
compensation paid to or accrued for him or her during the two-year period
preceding the date of termination. In addition, the Company has agreed to
indemnify each participant in the Plan against any and all liabilities he or she
may incur under Section 4999(a) of the Internal Revenue Code (relating to excise
taxes on excess parachute payments), including any income taxes and/or
additional excise taxes applicable to such indemnification payment. Mr. Klatsky
is also entitled to the payment under the Plan if he is not continued as the
Company's chief executive officer and Chairman of the Board or if the Company
fails to maintain the terms and conditions of Mr. Klatsky employment, including
a minimum level of compensation, as such existed on April 28, 1993.
Certain other plans of the Company in which certain of the Named
Executive Officers participate provide for benefits upon the occurrence of a
change in control of the Company. The Company's Capital Accumulation Plan, under
which participants remaining in the employ of the Company until established
target dates earn specified dollar amounts, provides that if a participant's
employment with the Company is terminated following a change in control of the
Company, the full undiscounted value of the future payments to be made to the
participant under the Plan becomes immediately payable in a lump sum. Further,
each participant's rights are subject to non-competition and non-disclosure
restrictions which automatically terminate upon a change in control of the
Company. The Option Plan provides that upon a change in control of the Company,
all options which were previously granted under the Option Plan and which have
not expired or been otherwise cancelled become immediately exercisable in full
(regardless of whether such options have fully vested).
Each participant who receives shares of Common Stock under the
Performance Restricted Stock Plan will have such shares issued pursuant to a
restricted stock agreement. Each restricted stock agreement will provide that,
except as provided below, if such participant leaves the employ of the Company
and its subsidiaries prior to the last day of the third fiscal year following
the fiscal year with respect to which the shares subject thereto ("Restricted
Shares") were issued, he or she will forfeit such Restricted Shares, and will be
required to retransfer such Restricted Shares to the Company without any
consideration. The foregoing requirement to retransfer Restricted Shares to the
Company will not apply, and forfeiture thereof will not occur, if the
participant's employment by the Company and its subsidiaries terminates by
reason of his or her death or permanent disability, or on or after his or her
65th birthday, or on or after a change in control of the Company. In addition,
if a participant's employment terminates during the three-year period by reason
of his or her termination without cause or after the later to occur of his or
her 55th birthday and his or her completion of 10 years of employment with the
Company and its subsidiaries, then, if and to the extent that the Compensation
Committee, upon the recommendation of the chief executive officer of the
Company, so determines, the restrictions on the transferability of his or her
Restricted Shares will terminate and the forfeiture will not occur.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The members of the Compensation Committee for the fiscal year ended
January 28, 1996 were Edward H. Cohen, Bruce Maggin, Ellis E. Meredith and
Steven L. Osterweis. From February 1987 until February 1988, Mr. Cohen was Vice
President and General Counsel of the Company. In addition, the law firm of
Rosenman & Colin LLP, of which Mr. Cohen is a senior partner, was engaged as the
Company's general outside counsel in the fiscal year ended January 28, 1996 and
will continue to be so engaged for the fiscal year ending February 2, 1997.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee's responsibility is to set the compensation
of all executive officers, recommend new incentive compensation plans and
implement changes and improvements to existing incentive compensation plans, all
subject to approval by the Board.
Overall Policy. The Compensation Committee believes that the Company's
executive officers constitute a highly qualified management team who have
largely been responsible for the Company's success. The Compensation Committee
has structured the Company's compensation program (1) primarily to compensate
its executive officers on an annual basis with a stable, secure cash salary at a
sufficiently high level to retain and motivate these officers, (2) to link a
portion of its executive officers' compensation to long term increases in value
created for the Company's stockholders by the efforts of these officers and (3)
to be consistent with the Company's high ethical standards. The Company's
compensation program does not rely, to any significant extent, on fringe
benefits or perquisites.
The key elements of the Company's executive compensation package are
base salaries, stock options and performance based compensation. The Company
eliminated the annual bonus portion of executive compensation several years ago
for two reasons: (1) annual bonuses, which are generally dependent upon a
variety of factors often beyond the control of Company executives, were not, in
the Board's view, the most effective motivational tool and (2) the business
inter-relationships of the Company's various operating divisions made it more
logical, in the Board's view, to grant stock options to key management, so that
a benefit would accrue to them only if the entire Company did well, as reflected
in the appreciation of the price of the Common Stock. In lieu of using annual
bonuses, the Company adopted a policy of offering competitive base salaries,
together with annual stock option grants. In addition, the Company believes its
fringe benefit plans are generally competitive and that it has a reputation for
providing a reasonably high level of job security in an industry known for high
levels of executive turnover.
In April 1995, based upon its own research and the information provided
by its consultant, Towers Perrin, the Compensation Committee recommended that
the Board adopt the Performance Restricted Stock Plan in order to provide the
Company with an additional means of attracting, retaining and incentivizing its
top executives by placing the Company in an appropriate competitive position in
its industry and broader peer group. The companies that the Compensation
Committee examined in ascertaining comparable compensation levels included
certain of those appearing in the S&P 500 Retail Store Composite Index, the S&P
500 Textile (Apparel Manufacturers) Index and the S&P 500 Shoes Index, as well
as other public and private companies in those industries. In addition, Towers
Perrin, whose database contains a broad selection of Fortune 1000 companies in
and out of the apparel industry, provided the Compensation Committee with
information regarding competitive executive compensation levels. Although it is
particularly difficult to ascertain precise comparable compensation levels
because of differences in the components of compensation and required
disclosures, the Compensation Committee attempted to target its compensation
levels in the 50th to 75th percentile of compensation, which it believed were
effectively being paid by the companies that the Compensation Committee
examined. Based upon the Compensation Committee's recommendation, the Board
adopted the Performance Restricted Stock Plan, which was approved by the
Company's stockholders at the 1995 Annual Meeting of Stockholders.
The Compensation Committee annually reviews the Company's executive
compensation package, taking into account corporate performance, stock price
performance and total return to stockholders, as well as industry conditions,
recommendations of the Company's chief executive officer and compensation
awarded to executives in other companies, especially those involved in the
apparel, footwear and specialty retail industries. In establishing future
executive compensation packages, the Compensation Committee may adopt additional
long-term incentive and/or annual bonus plans to meet the needs of changing
employment markets and economic, accounting and tax conditions. In determining
the compensation of an individual executive, the Compensation Committee intends
to take into account the performance of the executive and the full compensation
package afforded by the Company to him or her, including pension benefits,
insurance and other benefits. The views of Bruce J. Klatsky, as chief executive
officer, are considered by the Compensation Committee in their review of the
performance and compensation of individual executives.
Base Salaries. Annual salaries are determined by evaluating the
performance of the Company and of each executive. In the case of executives with
responsibility for particular operations of the Company, the financial results
of those operations are also considered. In evaluating overall performance and
results of particular operations of the Company, the Compensation Committee
reviews the extent to which the Company or the particular operations achieved
budgeted estimates for sales, gross and after-tax margins and earnings per share
presented to and reviewed by the Board for the fiscal year, and the Company's
sales and earnings results compared to those of many public peer companies
(including companies that are part of the Line of Business Index). Where
appropriate, the Compensation Committee considers non-financial performance
measures, including market share increases, manufacturing and distribution
efficiency gains, improvements in product quality, improvements in relations
with customers and suppliers and a demonstrated commitment to the welfare and
dignity of the Company's associates. Also considered are years of service to the
Company. In addition, in determining the annual salaries for the past two fiscal
years of certain executive officers the Compensation Committee considered, and
in determining the annual salaries for the current fiscal year of all executive
officers the Compensation Committee will consider, information provided by
Towers Perrin regarding competitive executive compensation. Finally, the
Compensation Committee takes into account the relative salaries of the executive
officers and determines what it believes are appropriate compensation level
distinctions among the executive officers and between the executive officers, on
the one hand, and the Company's chief executive officer, on the other hand.
There is no specific relationship between achieving or failing to achieve the
budgeted estimates or the Company's relative results, and the annual salaries
determined by the Compensation Committee for any of the Named Executive
Officers. No specific weight is attributed to any of the factors considered by
the Compensation Committee; the Compensation Committee considers all factors and
makes a subjective determination, based upon the experience of its members and
the recommendations of the Company's chief executive officer, of appropriate
compensation levels.
In determining the base salary of Bruce J. Klatsky, as chief executive
officer for the fiscal year ended January 28, 1996, the Compensation Committee
took into account the salaries of chief executive officers of many public peer
companies (including companies that are part of the Line of Business Index) and
private peer companies known to the members of the Committee, the fact that Mr.
Klatsky's base salary had not been increased for the prior two fiscal years, the
Company's failure to meet its financial goals for the fiscal year ended January
29, 1995, the performance of the Common Stock over the prior several years and
the assessment by the Compensation Committee of Mr. Klatsky's individual
performance. In evaluating whether the Company achieved its financial goals, the
Compensation Committee reviewed the extent to which the Company achieved
budgeted estimates for sales, gross and after-tax margins and earnings per share
presented to and reviewed by the Board and the Company's sales and earnings
results compared to those of many public peer companies (including companies
that are part of the Line of Business Index). The Compensation Committee also
reviewed several compensation surveys in determining Mr. Klatsky's compensation
package.
Long-Term Incentives. Under the Company's Option Plan, stock options
are granted to executives of the Company. Stock options are designed to align
the interests of executives with those of the stockholders. Stock options are
customarily granted at prices equal to fair market value at the date of grant.
Generally stock options may not be exercised until the third anniversary of the
date on which they are granted and grants of stock options do not become fully
exercisable until the fifth anniversary of the date on which they are granted.
The options generally remain exercisable during employment until the tenth
anniversary of the date of grant. This approach provides an incentive to the
executive to increase stockholder value over the long term, since the full
benefit of the options granted cannot be realized unless stock price
appreciation occurs over a number of years.
In view of changing tax laws and economic and employment conditions,
the Compensation Committee regularly examines other methods of incentive based
compensation and intends to implement, when appropriate, such methods in lieu of
or in addition to stock options.
Grants under the Option Plan were awarded in June 1995 to approximately
260 of the top executives of the Company. Each executive received a fixed number
of shares relative to his or her salary range and based on an option valuation
model as of the date of the grant. The options were granted in an amount such
that the value of the award, when combined with direct compensation and, for
participants in the Performance Restricted Stock Plan, the potential award that
executive might receive under the Performance Restricted Stock Plan, would
provide competitive total compensation relative to comparable positions at other
companies. The value of the options granted to the Named Executive Officers in
June 1995 were, on average, 31% of the direct compensation for the Named
Executive Officers for the fiscal year ended January 28, 1996.
Performance Based Compensation. Within 90 days after the commencement
of each fiscal year, the Compensation Committee is required to determine the
senior executives of the Company and its subsidiaries who will be participants
in the Performance Restricted Stock Plan with respect to such fiscal year, the
Corporate EBIT Goal and the Corporate Executive Goal or the Divisional Goal to
which such participant will be subject with respect to such fiscal year. If the
Corporate EBIT Goal is attained with respect to a fiscal year, each participant
who is employed by the Company or a subsidiary on the last day of such fiscal
year will be entitled to an award (an "Award"). In addition, where the Corporate
EBIT Goal is attained with respect to a fiscal year, each participant is
entitled to receive an additional Award based on achieving the Corporate
Executive Goal or his or her Divisional Goal, as the case may be.
Awards under the Performance Restricted Stock Plan are made in shares
of Common Stock. Each participant who receives shares of Common Stock will have
such shares issued pursuant to a restricted stock agreement. Each restricted
stock agreement provides, with certain exceptions, that if such participant
leaves the employ of the Company and its subsidiaries prior to the last day of
the third fiscal year following the fiscal year with respect to which the shares
subject thereto ("Restricted Shares") were issued, he or she will forfeit such
Restricted Shares, and will be required to retransfer such Restricted Shares to
the Company without any consideration.
The Corporate EBIT Goal determined by the Compensation Committee for
the fiscal year ended on January 28, 1996 was not achieved. Accordingly, no
shares of Common Stock were issued under the Performance Restricted Stock Plan
with respect to that fiscal year.
Stock Ownership. To ensure that management's interests remain aligned
with stockholders' interests, the Company encourages key executives to retain
shares acquired pursuant to the exercise of stock options. In addition,
employees of the Company acquire stock of the Company through the Company's
Associates Investment Plans. The fact that the majority of the Company's
executive officers have chosen to invest a large portion of the discretionary
portion of their Associates Investment Plan funds in Common Stock of the Company
evidences their deep commitment to and belief in the future success of the
Company.
Compensation Committee
Edward H. Cohen Ellis E. Meredith
Bruce Maggin Steven L. Osterweis
PERFORMANCE GRAPH
The following performance graph is a line graph comparing the yearly
change in the cumulative total stockholder return on the Company's Common Stock
against the cumulative return of the S&P 500 Composite Index, and a line of
business index comprised of the S&P 500 Retail Store Composite Index, the S&P
500 Textile (Apparel Manufacturers) Index and the S&P 500 Shoes Index for the
five fiscal years ended January 28, 1996. The figures represented in the
performance graph assume the reinvestment of dividends.
Comparison of 5 Year Cumulative
Total Return
LINES OF
PVH S&P 500 BUSINESS
1/91 100.00 100.00 100.00
1/92 228.05 122.65 145.51
1/93 318.79 135.61 163.52
1/94 390.69 152.99 138.77
1/95 175.07 153.83 138.95
1/96 118.00 213.15 160.19
- --------------
Note: Line of Business Index is composed of a blended weighing of the S&P 500
Retail Store Composite Index (50%), the S&P 500 Textile (Apparel
Manufacturers) Index (33%) and the S&P 500 Shoes Index (17%) to
correspond generally to the Company's relative sales attributable to
its retail, wholesale apparel and wholesale
footwear operations.
Value of $100.00 Invested after five years:
Phillips-Van Heusen Corporation Common Stock $ 118.00
S&P 500 Composite Index 213.15
Line of Business Index 160.19
APPROVAL OF AN AMENDMENT TO THE COMPANY'S CERTIFICATE
OF INCORPORATION TO ESTABLISH ANNUAL TERMS FOR
MEMBERS OF THE BOARD OF DIRECTORS
The Company's Certificate of Incorporation currently provides for the
classification of the Board of Directors into three classes. Under such
classification, at each annual meeting of stockholders, the successors to the
class of directors whose term expired at that meeting are elected for three-year
terms.
On April 16, 1996, the Board of Directors of the Company approved the
amendment of the Company's Certificate of Incorporation, subject to the approval
thereof by the stockholders, to eliminate the staggered three-year terms for
members of the Board of Directors and, instead, to provide for all of the
members of the Board of Directors to serve one year terms until each succeeding
annual meeting of the Company's stockholders. The full text of the provision in
the Company's Certificate of Incorporation which provides for the classification
of directors and the full text of the amendment which provides for the annual
election of the entire Board are set forth in Appendix A hereto.
The Board of Directors recommends a vote FOR the proposed amendment to
the Company's Certificate of Incorporation which will establish one-year terms
for the members of the Board of Directors.
The classification of the Board of Directors was considered desirable
in order to permit the Board to plan for a reasonable period into the future
without the possibility of extreme changes in the composition of the Board and
the policies of the Company on a yearly basis. In addition, it was believed that
the classification of directors was the best way to ensure that a majority of
the directors had prior experience on the Board.
The Board now believes that the annual election of the entire Board is
not inconsistent with either the maintenance of continuity in management
policies or the retention of directors who have had prior experience on the
Board, since all or a majority of the Board could be reelected at successive
annual meetings. In addition, the Board believes that it is now generally
considered better corporate governance practice for all of the members of the
Board of Directors to stand for election each year, if nominated. The annual
election of the entire Board will reaffirm that the members of the Board are
properly serving the interests of the Company and its stockholders.
Pursuant to the Company's Certificate of Incorporation, the affirmative
vote of the holders of 80% of the outstanding Common Stock would be required to
amend the Company's Certificate of Incorporation to effect the proposed
amendment.
Proxies received in response to this solicitation will be voted FOR the
proposal to amend the Company's Certificate of Incorporation unless otherwise
specified in the proxy.
SELECTION OF AUDITORS
The Board of Directors, with the concurrence of the Audit Committee,
has selected Ernst & Young LLP, independent auditors, as auditors for the fiscal
year ending February 2, 1997. Although stockholder ratification of the Board of
Directors' action in this respect is not required, the Board of Directors
considers it desirable for stockholders to pass upon the selection of auditors
and, if the stockholders disapprove of the selection, intends to reconsider the
selection of auditors for the fiscal year ending February 1, 1998, since it
would be impracticable to replace the Company's auditors so late into the
Company's current fiscal year. The auditing and tax fee paid to Ernst & Young
LLP for the fiscal year ended January 29, 1995 was $1,307,400. The audit and tax
work for the fiscal year ended January 28, 1996 is not yet completed, but it is
estimated that the fee will be lower as additional tax services provided in the
fiscal year ended January 29, 1995 were not required in the fiscal year ended
January 28, 1996.
It is expected that representatives of Ernst & Young LLP will be
present at the meeting, will have the opportunity to make a statement if they so
desire and will be available to respond to appropriate questions from
stockholders.
The Board of Directors recommends a vote FOR ratification of the
appointment of the auditors. Proxies received in response to this solicitation
will be voted FOR the appointment of the auditors unless otherwise specified in
the proxy.
MISCELLANEOUS
Any proposal of an eligible stockholder intended to be presented at the
next Annual Meeting of Stockholders must be received by the Company for
inclusion in its proxy statement and form of proxy relating to that meeting no
later than December 31, 1996.
The Board of Directors of the Company does not intend to present, and
does not have any reason to believe that others intend to present, any matter of
business at the meeting other than that set forth in the accompanying Notice of
Annual Meeting of Stockholders. However, if other matters properly come before
the meeting, it is the intention of the persons named in the enclosed form of
proxy to vote any proxies in accordance with their judgment.
The Company will bear the cost of preparing, assembling and mailing the
enclosed form of proxy, this Proxy Statement and other material which may be
sent to stockholders in connection with this solicitation. Solicitation may be
made by mail, telephone, telegraph and personal interview. The Company may
reimburse persons holding shares in their names or in the names of nominees for
their expense in sending proxies and proxy material to their principals. In
addition, Georgeson & Company, which is retained by the Company on a continuing
basis at an annual fee not to exceed $6,000, will aid in the solicitation of
proxies for the meeting.
Copies of the 1995 Annual Report to Stockholders are being mailed to
the stockholders simultaneously with this Proxy Statement. If you want to save
the Company the cost of mailing more than one Annual Report to the same address,
at your request to the Secretary of the Company, mailing of the duplicate copy
to the account or accounts you select will be discontinued.
The Company will provide to any stockholder a copy of its Annual Report
on Form 10-K filed with the Securities and Exchange Commission for the fiscal
year ended January 28, 1996 upon written request to:
The Secretary
Phillips-Van Heusen Corporation
1290 Avenue of the Americas
New York, New York 10104
By order of the Board of Directors,
Pamela N. Hootkin
Secretary
New York, New York
April 29, 1996
APPENDIX A
Set forth below is the present text of Article FIFTH of the Company's
Certificate of Incorporation:
"FIFTH: A. The Board of Directors shall consist of not less than 9 nor more
than 21 members as determined from time to time by the Board of Directors.
B. The Board of Directors shall be divided into three classes; the term
of office of those of the first class to expire at the annual meeting of the
stockholders next ensuing; of the second class at the annual meeting of the
stockholders one year thereafter; of the third class at the annual meeting of
the stockholders two years thereafter; and at each annual meeting of the
stockholders, directors shall be chosen for a full term of three years to
succeed those whose terms expire.
C. The affirmative vote of not less than 80% of the outstanding stock
of the Corporation entitled to vote thereon shall be required to authorize any
amendment to the Certificate of Incorporation of the Corporation which shall
alter, amend, change or repeal any of the provisions of part B of this Article
FIFTH."
If the proposal to amend the Company's Certificate of Incorporation is
approved, the present Article FIFTH will be replaced by a new Article FIFTH of
the Company's Certificate of Incorporation which will read as follows:
"FIFTH: The Board of Directors shall consist of not less than 9 nor more
than 21 members as determined from time to time by the Board of Directors."
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
PHILLIPS-VAN HEUSEN CORPORATION
1290 Avenue of the Americas
New York, New York 10104-0101
BRUCE J. KLATSKY and IRWIN W. WINTER, or either of them, with power of
substitution, are hereby authorized to represent the undersigned and to vote all
shares of the Common Stock of PHILLIPS-VAN HEUSEN CORPORATION held by the
undersigned at the Annual Meeting of Stockholders to be held in New York, New
York, on June 18, 1996, and any adjournments thereof, on the matters printed on
the reverse side.
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If this Proxy is executed but no
directions are given, this Proxy will be voted:
o FOR the amendment to the Company's Certificate of Incorporation;
o FOR the election of all of the nominees for director; and
o FOR the appointment of auditors.
(Continued, and to be dated and signed on the other side.)
PHILLIPS-VAN HEUSEN CORPORATION
P.O. BOX 11287
NEW YORK, N.Y. 10203-0287
The Board recommends a vote FOR proposals 1, 2A, 2B and 3 below:
1. Amendment to the Company's Certificate of Incorporation.
FOR AGAINST ABSTAIN
/x/ /x/ /x/
2A. If proposal 1. above is approved, election of the nominees for director
listed below.
FOR all nominees WITHHOLD AUTHORITY to vote EXCEPTIONS*
listed below /x/ for all nominees listed below /x/ /x/
Nominees: Edward H. Cohen, Estelle Ellis, Joseph B. Fuller, Bruce J.
Klatsky, Marie Elena Lagomasino, Harry N.S. Lee, Bruce Maggin, Ellis E.
Meredith, Steven L. Osterweis, William S. Scolnick, Peter J. Solomon, Irwin
W. Winter
(Instruction: To withhold authority to vote for any individual nominee,
mark the "Exceptions" box and write that nominee's name in the space
provided below:)
*Exceptions ______________________________________________________________
2B. If proposal 1. above is not approved, election of the nominees for director
listed below:
FOR all nominees WITHHOLD AUTHORITY to vote EXCEPTIONS*
listed below /x/ for all nominees listed below /x/ /x/
Nominees: Joseph B. Fuller, Bruce J. Klatsky, Bruce Maggin, Steven L.
Osterweis
(Instruction: To withhold authority to vote for any individual nominee,
mark the "Exceptions" box and write that nominee's name in the space
provided below:)
*Exceptions ______________________________________________________________
3. Appointment of Auditors.
FOR AGAINST ABSTAIN
/x/ /x/ /x/
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
FOR AGAINST ABSTAIN
/x/ /x/ /x/
NOTE: The signature should agree with the name on your stock certificate. If
acting as executor, administrator, trustee, guardian, etc., you should so
indicate when signing. If the signer is a corporation, please sign the full
corporate name, by duly authorized officer. If shares are held jointly, each
stockholder named should sign.
Dated: ___________________________________________________________, 1996
________________________________________________________________________
Signature
________________________________________________________________________
Signature, if held jointly
To vote, fill in (X) with black or blue ink only. /x/
