<PAGE>
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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
G-III APPAREL GROUP, LTD.
.................................................................
(Name of Registrant as Specified In Its Charter)
.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
.................................................................
2) Aggregate number of securities to which transaction
applies:
.................................................................
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it was
determined):
.................................................................
4) Proposed maximum aggregate value of transaction:
.................................................................
5) Total fee paid:
.................................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
.................................................................
2) Form, Schedule or Registration Statement No.:
.................................................................
3) Filing Party:
.................................................................
4) Date Filed:
.................................................................
<PAGE>
[LOGO]
Dear Stockholder:
You are cordially invited to attend the Company's Annual Meeting of
Stockholders to be held on Thursday, June 22, 1995 at 10:00 A.M., Eastern
Standard Time, at the Company's facilities at 15 Enterprise Avenue, Secaucus,
New Jersey.
The formal Notice of Meeting and the accompanying Proxy Statement set forth
proposals for your consideration this year. You are being asked to elect
directors and to ratify the appointment of Grant Thornton LLP as the independent
certified public accountants of the Company.
At the meeting, the Board of Directors will also report on the affairs of
the Company, and a discussion period will be provided for questions and comments
of general interest to stockholders.
We look forward to greeting personally those of you who are able to be
present at the meeting. However, whether or not you are able to be with us at
the meeting, it is important that your shares be represented. Accordingly, you
are requested to sign, date and mail, at your earliest convenience, the enclosed
proxy in the envelope provided for your use.
Thank you for your cooperation.
Very truly yours,
MORRIS GOLDFARB
MORRIS GOLDFARB
President and Chief Executive Officer
May 30, 1995
<PAGE>
G-III APPAREL GROUP, LTD.
345 WEST 37TH STREET
NEW YORK, NEW YORK 10018
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 22, 1995
------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of G-III
Apparel Group, Ltd. (the 'Company') will be held on Thursday, June 22, 1995 at
10:00 A.M., Eastern Standard Time, at the Company's facilities at 15 Enterprise
Avenue, Secaucus, New Jersey, for the following purposes:
(1) To elect nine directors to serve for the ensuing year.
(2) To consider and act upon a proposal to ratify the appointment of
Grant Thornton LLP as the Company's independent certified public
accountants for the fiscal year ending January 31, 1996.
(3) To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
Only stockholders of record at the close of business on May 5, 1995 will be
entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof.
All stockholders are cordially invited to attend the Annual Meeting in
person. HOWEVER, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON,
EACH STOCKHOLDER IS URGED TO COMPLETE, DATE AND SIGN THE ENCLOSED FORM OF PROXY
AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED. No postage is required if the
proxy is mailed in the United States. Stockholders who attend the Annual Meeting
may revoke their proxy and vote their shares in person.
By Order of the Board of Directors
ALAN FELLER
Secretary
New York, New York
May 30, 1995
<PAGE>
G-III APPAREL GROUP, LTD.
345 WEST 37TH STREET
NEW YORK, NEW YORK 10018
-------------------------------
PROXY STATEMENT
-------------------------------
GENERAL INFORMATION
GENERAL
This Proxy Statement (first mailed to stockholders on or about May 30,
1995) is furnished to the holders of Common Stock, par value $.01 per share (the
'Common Stock'), of G-III Apparel Group, Ltd. (the 'Company') in connection with
the solicitation by the Board of Directors of the Company of proxies for use at
the Annual Meeting of Stockholders (the 'Annual Meeting'), or at any adjournment
thereof, pursuant to the accompanying Notice of Annual Meeting of Stockholders.
The Annual Meeting will be held on Thursday, June 22, 1995, at 10:00 A.M.,
Eastern Standard Time, at the Company's facilities at 15 Enterprise Avenue,
Secaucus, New Jersey.
It is proposed that at the Annual Meeting: (i) nine directors will be
elected and (ii) the appointment of Grant Thornton LLP as the independent
certified public accountants of the Company for the fiscal year ending January
31, 1996 will be ratified.
Management currently is not aware of any other matters which will come
before the Annual Meeting. If any other matters properly come before the Annual
Meeting, the persons designated as proxies intend to vote in accordance with
their best judgment on such matters.
Proxies for use at the Annual Meeting are being solicited by the Board of
Directors of the Company. Proxies will be solicited chiefly by mail; however,
certain officers, directors, employees and agents of the Company, none of whom
will receive additional compensation therefor, may solicit proxies by telephone,
telegram or other personal contact. The Company will bear the cost of the
solicitation of the proxies, including postage, printing and handling, and will
reimburse the reasonable expenses of brokerage firms and others for forwarding
material to beneficial owners of shares of Common Stock.
REVOCABILITY AND VOTING OF PROXY
A form of proxy for use at the Annual Meeting and a return envelope for the
proxy are enclosed. Unless otherwise indicated on the form of proxy, shares of
Common Stock represented by any proxy in the enclosed form, assuming the proxy
is properly executed and received by the Company prior to the Annual Meeting,
will be voted with respect to the following items on the agenda: (i) the
election of each of the nominees for director as shown on the form of proxy and
(ii) the appointment of Grant Thornton LLP as the independent certified public
accountants of the Company.
Stockholders may revoke the authority granted by their execution of a proxy
at any time prior to the effective exercise of the powers conferred by that
proxy, by filing with the Secretary of the Company a written notice of
revocation or a duly executed proxy bearing a later date, or by voting in person
at the meeting. Shares of Common Stock represented by executed and unrevoked
proxies will be voted in accordance with the instructions specified in such
proxies. If no specifications are given, the proxies
<PAGE>
intend to vote the shares represented thereby 'for' the election of each of the
nominees for director as shown on the form of proxy and 'for' the ratification
of the appointment of Grant Thornton LLP as the independent certified public
accountants of the Company, and in accordance with their best judgment on any
other matters which may properly come before the meeting.
RECORD DATE AND VOTING RIGHTS
On May 5, 1995, there were 6,459,381 shares of Common Stock outstanding,
each of which shares is entitled to one vote upon each of the matters to be
presented at the Annual Meeting. Only stockholders of record at the close of
business on May 5, 1995 are entitled to notice of and to vote at the Annual
Meeting or any adjournment thereof. The holders of a majority of the outstanding
shares of Common Stock, present in person or by proxy and entitled to vote, will
constitute a quorum at the Annual Meeting. Abstentions and broker non-votes will
be counted for purposes of determining the presence or absence of a quorum, but
will not be counted with respect to the specific matter being voted upon.
'Broker non-votes' are shares held by brokers or nominees which are present in
person or represented by proxy, but which are not voted on a particular matter
because instructions have not been received from the beneficial owner.
The affirmative vote of the holders of a plurality of the shares of Common
Stock present in person or represented by proxy and entitled to vote at the
Annual Meeting is required for the election of directors. The affirmative vote
of the holders of a majority of the shares of Common Stock present in person or
represented by proxy and entitled to vote at the Annual Meeting is required for
the ratification of the appointment of Grant Thornton LLP.
2
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK BY
CERTAIN STOCKHOLDERS AND MANAGEMENT
The following table sets forth information as of April 1, 1995 (except as
otherwise noted in the footnotes) regarding the beneficial ownership of the
Company's Common Stock of: (i) each person known by the Company to own
beneficially more than five percent of the outstanding Common Stock; (ii) each
director and nominee for director of the Company; (iii) each executive officer
named in the Summary Compensation Table (see 'Executive Compensation' below);
and (iv) all directors and executive officers of the Company as a group. Except
as otherwise specified, the named beneficial owner has the sole voting and
investment power over the shares listed.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENTAGE
BENEFICIAL OWNERSHIP OF OF
NAME AND ADDRESS OF BENEFICIAL OWNER COMMON STOCK COMMON STOCK
- - ---------------------------------------------------------------------- ----------------------- ------------
<S> <C> <C>
Aron Goldfarb(1)...................................................... 1,181,566(2) 18.1%
Morris Goldfarb(1).................................................... 1,996,099(3) 30.5%
Lyle Berman .......................................................... 304,989(4) 4.7%
433 Bushaway Road
Wayzata, MN 55391
Thomas J. Brosig ..................................................... 7,350(5) *
4695 Forestview Lane
Plymouth, MN 55442
Alan Feller(1)........................................................ 21,000(6) *
Carl Katz(1).......................................................... 30,555(6) *
Willem van Bokhorst .................................................. 4,890(7) *
c/o Smeets Thesseling & van Bokhorst
805 Third Avenue
New York, NY 10022
Sigmund Weiss ........................................................ 7,875(8) *
c/o Green & Weiss
225 West 34th Street
New York, NY 10001
George J. Winchell ................................................... 1,680(6) *
c/o Sea Oaks
8785 Lakeside Boulevard
Vero Beach, FL 32963
FMR Corp.(9) ......................................................... 518,420 8.0%
82 Devonshire Street
Boston, MA 02109
Dimensional Fund Advisors Inc.(10) ................................... 386,340 6.0%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
Jeanette Nostra-Katz(1)............................................... 40,855(6) *
Keith S. Jones(1)..................................................... 17,650(6) *
All directors and executive officers as a group (16 persons).......... 3,646,329(7)(11) 53.7%
</TABLE>
- - ------------
* Less than one percent.
(1) The address of such individual is c/o G-III Apparel Group, Ltd., 345 West
37th Street, New York, New York 10018.
(footnotes continued on next page)
3
<PAGE>
(footnotes continued from previous page)
(2) Includes 74,250 shares of Common Stock which may be acquired within 60 days
upon the exercise of options.
(3) Includes 94,250 Shares of Common Stock which may be acquired within 60 days
upon the exercise of options.
(4) Includes 5,040 shares of Common Stock which may be acquired within 60 days
upon the exercise of options.
(5) Includes 4,200 shares of Common Stock which may be acquired within 60 days
upon the exercise of options.
(6) Shares may be acquired within 60 days upon the exercise of options.
(7) Includes an aggregate of 210 shares held by Mr. van Bokhorst's children.
Mr. van Bokhorst expressly disclaims beneficial ownership of these shares.
Also includes 1,680 shares of Common Stock which may be acquired within 60
days upon the exercise of options.
(8) Includes 6,300 shares of Common Stock which may be acquired within 60 days
upon the exercise of options.
(9) Information is derived from the Schedule 13G, dated February 13, 1995 (the
'FMR Schedule 13G'), filed by the FMR Corp. ('FMR') with the Securities and
Exchange Commission (the 'Commission'). The FMR Schedule 13G states that
Fidelity Management & Research Company, a wholly owned subsidiary of FMR
and a registered investment adviser, is deemed to have beneficial ownership
of the 518,420 shares of the Company's Common Stock as of December 31,
1994, as a result of its acting as investment adviser to Fidelity
Low-Priced Stock Fund, a registered open-end investment company which owned
the 518,420 shares.
(10) Information is derived from the Schedule 13G, dated January 30, 1995 (the
'DFA Schedule 13G'), filed by Dimensional Fund Advisors Inc. ('DFA') with
the Commission. The DFA Schedule 13G states that DFA is deemed to have
beneficial ownership as of December 31, 1994 of 386,340 shares of the
Company's Common Stock, all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc., a registered open-end investment company,
or in series of the DFA Investment Trust Company, a Delaware business
trust, or the DFA Group Trust and DFA Participation Group Trust, investment
vehicles for qualified employee benefit plans, for all of which DFA serves
as investment manager. DFA disclaims beneficial ownership of all such
shares.
(11) Includes an aggregate of 329,280 shares which may be acquired within 60
days upon the exercise of options.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
Nine directors (constituting the entire Board) are to be elected at the
Annual Meeting. Unless otherwise specified, the enclosed proxy will be voted in
favor of the persons named below (all of whom are currently directors of the
Company) to serve until the next annual meeting of stockholders and until their
respective successors shall have been duly elected and qualified. If any of
these nominees becomes unavailable for any reason, or if a vacancy should occur
before the election, the shares represented by the proxy will be voted for the
person, if any, who is designated by the Board of Directors to replace the
nominee or to fill the vacancy on the Board. All nominees have consented to
4
<PAGE>
be named and have indicated their intent to serve if elected. The Board of
Directors has no reason to believe that any of the nominees will be unable to
serve or that any vacancy on the Board of Directors will occur.
The nominees, their respective ages, the year in which each first became a
director of the Company and their principal occupations or employment during the
past five years are as follows:
<TABLE>
<CAPTION>
YEAR FIRST
BECAME PRINCIPAL OCCUPATION
NOMINEE AGE DIRECTOR DURING THE PAST FIVE YEARS
- - ----------------------------- --- ---------- ----------------------------------------------------------------
<S> <C> <C> <C>
Morris Goldfarb.............. 44 1974 President and Chief Executive Officer of the Company. Served as
either President or Vice President of the Company and its
predecessors since its formation in 1974. Director of Grand
Casinos, Inc.
Aron Goldfarb................ 72 1974 Chairman of the Board of the Company. Served as either President
or Vice President of the Company and its predecessors since
its formation in 1974. As of January 1, 1995, Mr. Goldfarb
became a consultant to the Company.
Lyle Berman.................. 53 1989 Since February 1991, Chairman and Chief Executive Officer of
Grand Casinos, Inc. From July 1987 to January 1991, President
or Chairman of Berman Consulting Corporation. From March 1987
until November 1988, Chairman of the Board of Directors,
President and Chief Executive Officer of Bermans Specialty
Stores, Inc., a leather retailer. From July 1987 to August
1989, President and Treasurer of Ante Corp., a corporation
with which the Company was merged in 1989. Director of Casino
Data Systems, Casino Hospitality Corp., Grand Casinos, Inc.,
Innovative Gaming Corporation of America and Mississippi
Gaming Development Corp.
Thomas J. Brosig............. 45 1992 Since August 1994, Executive Vice President of Grand Casinos,
Inc. From February 1991 to August 1994, Chief Operating
Officer of Grand Casinos, Inc. From April 1990 to January
1991, Vice President of Berman Consulting Corporation. From
August 1989 through March 1990, Executive Vice President of
Administration and Finance of the Company. Director of Grand
Casinos, Inc. and Game Financial Corporation
Alan Feller.................. 53 1995 Vice President -- Finance and Administration, Treasurer and
Secretary of the Company since March 1990 and Chief Financial
Officer of the Company since January 1990.
Carl Katz.................... 55 1989 Executive Vice President of Siena Leather Ltd. ('Siena'), a
subsidiary of the Company, since 1989. Prior thereto, Vice
President of Siena since 1981.
Willem van Bokhorst.......... 48 1989 Partner in the Netherlands Antilles law firm of Smeets,
Thesseling and van Bokhorst for more than the past five years.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST
BECAME PRINCIPAL OCCUPATION
NOMINEE AGE DIRECTOR DURING THE PAST FIVE YEARS
- - ----------------------------- --- ---------- ----------------------------------------------------------------
<S> <C> <C> <C>
Sigmund Weiss................ 74 1974 Certified public accountant since 1948. Operated a general
accounting practice for the past 35 years. Served as an
accountant for the Company since its inception.
George J. Winchell........... 69 1990 Retired as Senior Vice President of W.R. Grace & Co. in 1994.
Since joining W.R. Grace & Co. in 1949, held positions with
controller's office, the Specialty Chemicals Group, the Office
of the President and the Retail Group.
</TABLE>
Aron Goldfarb and Morris Goldfarb are father and son, respectively. Carl
Katz and Jeanette Nostra-Katz, Executive Vice President of the Company and of
Siena, are married to each other.
The Board of Directors of the Company has several committees, including an
Executive Committee, Audit Committee, Option Committee and Compensation
Committee. During the fiscal year ended January 31, 1995, each director in
office during such fiscal year attended not less than 75% of the aggregate
number of meetings of the Board of Directors and of meetings of committees of
the Board on which he served, except for George J. Winchell and Willem van
Bokhorst. The Board of Directors held three meetings and acted three times by
unanimous written consent during the fiscal year ended January 31, 1995.
The Executive Committee, composed of Morris Goldfarb, Aron Goldfarb and
Carl Katz, is vested with the powers of the Board of Directors, to the fullest
extent permitted by law, between meetings of the Board. The Executive Committee
met three times during the fiscal year ended January 31, 1995, with all members
of the Committee in attendance.
The Audit Committee, composed of Lyle Berman, Sigmund Weiss and Willem van
Bokhorst, is charged with reviewing the Company's audit and meeting with the
Company's independent accountants to review the Company's internal controls and
financial management practices. The Audit Committee met once during the fiscal
year ended January 31, 1995, with Messrs. Berman and Weiss in attendance.
The Option Committee, composed of George Winchell and Willem van Bokhorst,
is empowered to oversee and make all decisions regarding the Company's 1989
Stock Option Plan (the '1989 Plan'), functioning as the 'Committee' under the
Plan. The Option Committee acted by unanimous written consent four times in the
fiscal year ended January 31, 1995. The G-III Apparel Group, Ltd. Stock Option
Plan For Non-Employee Directors (the 'Non-Employee Directors Plan') is
administered by the Board of Directors.
The Compensation Committee, composed of Thomas J. Brosig and Sigmund Weiss,
was established in March 1994 to establish and review compensation practices and
policies of the Company. The Compensation Committee is empowered to recommend
and/or set the compensation for the executive officers and key employees of the
Company as well as authorize and approve employment agreements. The Compensation
Committee acted by unanimous written consent once in the fiscal year ended
January 31, 1995.
VOTE REQUIRED
The nine nominees receiving the highest number of affirmative votes of the
shares present in person or represented by proxy and entitled to vote for them
shall be elected as directors. Only votes
6
<PAGE>
cast for a nominee will be counted, except that the accompanying proxy will be
voted for all nominees in the absence of instructions to the contrary.
Abstentions, broker non-votes and instructions on the accompanying proxy card to
withhold authority to vote for one or more nominees will not be counted as a
vote for any such nominee.
THE BOARD OF DIRECTORS DEEMS THE ELECTION AS DIRECTORS OF THE NINE NOMINEES
LISTED ABOVE TO BE IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND
RECOMMENDS A VOTE 'FOR' THEIR ELECTION.
EXECUTIVE COMPENSATION
The following table sets forth information concerning all cash and non-cash
compensation awarded to, earned by or paid to the Company's chief executive
officer and each of the four other most highly compensated executive officers
for the fiscal year ended January 31, 1995 for services in all capacities to the
Company and its subsidiaries.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION(1) ------------
-------------------- OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR(2) SALARY($) BONUS($) (#)(3) COMPENSATION($)(4)
- - --------------------------------------- ------- -------- -------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
Morris Goldfarb ....................... 1995 $605,917 -- 140,500(5) $ 14,628
President and Chief Executive Officer 1994 $650,000 -- -- $ 14,628
1993 $325,000 -- (6) 52,500 $ 7,314
1992 $500,000 $223,280 -- $ 14,628
Aron Goldfarb ......................... 1995 $353,239 -- 30,000(8) $ 31,907
Chairman of the Board(7) 1994 $475,500 -- -- $ 31,907
1993 $237,500 -- 52,500 $ 15,954
1992 $475,000 -- -- $ 31,907
Jeanette Nostra Katz .................. 1995 $249,017 -- 12,500(9) --
Executive Vice President 1994 $250,000 $ 46,000 21,000 --
1993 $103,354 $ 50,000 47,250 --
1992 $175,480 $ 50,000 -- --
Keith S. Jones ........................ 1995 $197,081 -- -- (10) --
Vice President-Foreign Manufacturing 1994 $147,624 $ 50,000 -- --
of G-III Leather Fashions, Inc. 1993 $ 61,250 $ 25,000 -- --
1992 $110,000 $ 20,000 -- --
Alan Feller ........................... 1995 $196,154 -- 12,000(11) --
Vice President of Administration and 1994 $200,000 $ 35,000 -- --
Finance, Treasurer and Secretary 1993 $ 93,770 $ 60,000 21,000 --
1992 $178,367 $ 10,000 -- --
Carl Katz ............................. 1995 $161,827 -- 1,650(12) --
Executive Vice President of Siena 1994 $165,000 $ 20,000 --
Leather, Ltd. 1993 $ 75,577 $ 15,000 --
1992 $150,000 $ 10,000 --
</TABLE>
(1) Amounts reflected do not include perquisites and other personal benefits
received by any named executive, which, in all instances, were less than the
lesser of $50,000 or 10% of the total of annual salary and bonus reported
for the named executive.
(2) 1992 reflects the twelve-month fiscal year ended July 31, 1992. 1993
reflects the six-month transition period from August 1, 1992 through January
31, 1993, as the Company changed its fiscal
(footnotes on next page)
7
<PAGE>
(footnotes from previous page)
year end from July 31 to January 31, in January 1993. Each of 1994 and 1995
represents the twelve-month fiscal year ended January 31 of that year.
(3) Amounts have been revised to reflect the 5% stock dividend effected in
February 1993.
(4) Amounts represent insurance premiums paid by the Company for term life
insurance for the benefit of the named executive's spouse.
(5) Excludes options to purchase 178,750 shares of Common Stock granted in
connection with the repricing, effected in December 1994, of all existing
options granted under the Company's 1989 Plan (the '1994 Repricing').
(6) Morris Goldfarb received a prepaid bonus of $200,000 in December 1992 with
respect to the twelve-month period ended July 31, 1993, subject to his
obligation to return all or a portion of this amount if the bonus actually
earned by him under the employment agreement then in effect was less than
$200,000. No portion of the bonus was earned by Mr. Goldfarb and he repaid
the $200,000 to the Company in January 1994.
(7) Aron Goldfarb retired as an employee of the Company effective January 1,
1995. He remains a consultant to the Company.
(8) Excludes options to purchase 78,750 shares of Common Stock granted in
connection with the 1994 Repricing.
(9) Excludes options to purchase 53,550 shares of Common Stock granted in
connection with the 1994 Repricing.
(10) Excludes options to purchase 38,375 shares of Common Stock granted in
connection with the 1994 Repricing.
(11) Excludes options to purchase 28,875 shares of Common Stock granted in
connection with the 1994 Repricing.
(12) Excludes options to purchase 37,800 shares of Common Stock granted in
connection with the 1994 Repricing.
8
<PAGE>
The following table sets forth information on option grants in the fiscal
year ended January 31, 1995 to the persons named in the Summary Compensation
Table. Unless otherwise indicated, all option grants become exercisable in
annual 20% increments beginning on the first anniversary of their respective
grant dates. Numbers of shares and exercise prices in the footnotes have been
revised to reflect the 5% stock dividend effected in February 1993.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
% OF TOTAL
NUMBER OF OPTIONS POTENTIAL REALIZABLE
SECURITIES GRANTED TO VALUE AT ASSUMED
UNDERLYING EMPLOYEES EXERCISE ANNUAL RATES OF STOCK
OPTIONS IN FISCAL PRICE EXPIRATION PRICE APPRECIATION
NAME GRANTED(1) YEAR(2) ($/SH) DATE FOR OPTION TERM(3)
- - ------------------------------ ---------- ----------- -------- ------------- ---------------------
5% 10%
--------- --------
<S> <C> <C> <C> <C> <C> <C>
Morris Goldfarb............... 178,750 22.9% $ 2.00 (4) $192,938 $478,075
100,000(5) 12.8% $ 4.00(5) Feb. 1 2004 -- (5) -- (5)
12,500(6) 1.6% $ 5.50 June 30, 2004 $ 7,625 $ 52,875
12,500(6) 1.6% $ 6.50 June 30, 2004 $ 0 $ 40,375
15,500 2.0% $ 2.00 Dec. 5, 2004 $ 19,530 $ 49,445
Aron Goldfarb................. 78,750 10.1% $ 2.00 (7) $ 66,938 $159,075
12,500(6) 1.6% $ 5.50 June 30, 2004 $ 7,625 $ 52,875
12,500(6) 1.6% $ 6.50 June 30, 2004 $ 0 $ 40,375
5,000 0.6% $ 2.00 Dec. 5, 2004 $ 6,300 $ 15,956
Jeanette Nostra-Katz.......... 73,550 9.2% $ 2.00 (8) $ 60,500 $143,419
12,500 1.6% $ 2.00 Dec. 5, 2004 $ 15,750 $ 39,875
Keith S. Jones................ 38,375 4.8% $ 2.00 (9) $ 35,519 $ 83,380
2,000 0.3% $ 2.00 Dec. 5, 2004 $ 2,520 $ 6,380
Alan Feller................... 28,875 3.7% $ 2.00 (10) $ 21,131 $ 47,140
12,000 1.5% $ 2.00 Dec. 5, 2004 $ 15,120 $ 38,280
Carl Katz..................... 37,800 4.7% $ 2.00 (11) $ 25,725 $ 59,241
1,650 0.2% $ 2.00 Dec. 5, 2004 $ 2,079 $ 5,264
</TABLE>
- - ------------
(1) For each named executive officer, the first option listed represents
options amended in connection with the 1994 Repricing. The vesting terms
and expiration dates were not amended at the time of the 1994 Repricing.
The other options listed represent grants under the Company's 1989 Plan,
except as set forth in note 6.
(2) Based upon options to purchase 798,825 shares granted to all employees in
the fiscal year ended January 31, 1995, including 661,650 options amended
at the time of the 1994 Repricing.
(3) These amounts represent assumed rates of appreciation in the price of the
Company's Common Stock during the terms of the options in accordance with
rates specified in applicable federal securities regulations. Actual gains,
if any, on stock option exercises will depend on the future price of the
Common Stock and overall market conditions. Although the market price of
the Company's Common Stock on June 30, 1994 was $3.75, the options granted
on such date have exercise prices of $5.50 and $6.50 per share. The 5% rate
of appreciation over the 10 year term of the granted options of the $2.00
and $3.75 stock prices on the respective dates of grant would result
(footnotes continued on next page)
9
<PAGE>
(footnotes continued from previous page)
in stock prices of $3.26 and $6.11, respectively. The 10% rate of
appreciation over the 10 year term of the granted options of the $2.00 and
$3.75 stock prices on the respective dates of grant would result in stock
prices of $5.19 and $9.73, respectively. There is no representation that
the rates of appreciation reflected in this table will be achieved.
(4) The reported transaction involved the repricing of existing options to
purchase 26,250, 52,500 and 100,000 shares of Common Stock pursuant to the
1989 Plan, at exercise prices of $3.21, $5.00, and $4.00, respectively,
originally granted on June 26, 1991, October 12, 1992 and February 1, 1994,
respectively.
(5) The options to purchase 100,000 shares of Common Stock granted on February
1, 1994, in connection with the execution of a new employment agreement by
Mr. Goldfarb, were amended in connection with the 1994 Repricing and are
also included in the 178,750 options amended at the time of the 1994
Repricing. The exercise price of such options has been reduced to $2.00 in
connection with the 1994 Repricing.
(6) The options to purchase 25,000 shares of Common Stock granted to each of
Morris Goldfarb and Aron Goldfarb on June 30, 1994, in connection with the
execution of certain guarantees by each of them of bank debt of the
Company, were not issued under the Company's 1989 Plan. See 'Certain
Relationships and Related Transactions.'
(7) The reported transaction involved the repricing of existing options to
purchase 26,250, and 52,500 shares of Common Stock pursuant to the 1989
Plan, at exercise prices of $3.21 and $5.00, respectively, originally
granted on June 26, 1991 and October 12, 1992, respectively.
(8) The reported transaction involved the repricing of existing options to
purchase 10,500, 10,500, 6,300, 26,250 and 20,000 shares of Common Stock
pursuant to the 1989 Plan, at exercise prices of $7.62, $7.62, $4.40, $5.00
and $5.00, respectively, originally granted on December 31, 1989, December
31, 1989, May 1, 1991, October 12, 1992 and December 31, 1993,
respectively.
(9) The reported transaction involved the repricing of existing options to
purchase 5,250, 7,875, 5,250 and 20,000 shares of Common Stock pursuant to
the 1989 Plan, at exercise prices of $7.62, $4.40, $5.00 and $4.25,
respectively, originally granted on December 31, 1989, May 1, 1991, October
12, 1992 and December 31, 1993, respectively.
(10) The reported transaction involved the repricing of existing options to
purchase 10,500, 7,875 and 10,500 shares of Common Stock pursuant to the
1989 Plan, at exercise prices of $7.62, $4.40 and $5.00, respectively,
originally granted on December 31, 1989, May 1, 1991 and October 12, 1992,
respectively.
(11) The reported transaction involved the repricing of existing options to
purchase 10,500, 10,500, 6,300 and 10,500 shares of Common Stock pursuant
to the 1989 Plan, at exercise prices of $7.62, $7.62, $4.40 and $5.00,
respectively, originally granted on December 31, 1989, December 31, 1989,
May 1, 1991 and October 12, 1992.
10
<PAGE>
The following table sets forth information with respect to unexercised
stock options held by the persons named in the Summary Compensation Table at
January 31, 1995. There were no exercises of options to purchase the Company's
Common Stock by such individuals during the fiscal year ended January 31, 1995
and, at January 31, 1995, all of the outstanding options had exercise prices
greater than the market value of the Company's Common Stock on that date.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED OPTIONS HELD AT
FISCAL YEAR END(#)
--------------------------------------
NAME EXERCISABLE UNEXERCISABLE
- - ----------------------------------------------------- ------------------ ------------------
<S> <C> <C>
Morris Goldfarb...................................... 61,750 157,500
Aron Goldfarb........................................ 61,750 47,000
Jeanette Nostra-Katz................................. 38,650 47,400
Alan Feller.......................................... 19,425 21,450
Keith S. Jones....................................... 16,075 24,300
Carl Katz............................................ 28,350 11,100
</TABLE>
The following table sets forth information related to each option repricing
during the last ten years of options to purchase the Company's Common Stock held
by executive officers of the Company. The vesting terms and expiration dates
were not amended at the time of repricing. Numbers of shares and exercise prices
have been revised to reflect the 5% stock dividend effected in February 1993.
TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
ORIGINAL
MARKET PRICE OPTION TERM
NUMBER OF OF STOCK AT EXERCISE PRICE REMAINING AT
OPTIONS TIME OF AT TIME OF NEW DATE OF
REPRICED OR REPRICING OR REPRICING OR EXERCISE REPRICING OR
NAME DATE AMENDED AMENDMENT AMENDMENT PRICE AMENDMENT
- - ------------------------------------- -------- ----------- ------------ -------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Morris Goldfarb...................... 12/5/94 26,250 $ 2.00 $ 3.21 $ 2.00 78 months
12/5/94 52,500 $ 2.00 $ 5.00 $ 2.00 94 months
12/5/94 100,000 $ 2.00 $ 4.00 $ 2.00 110 months
Aron Goldfarb........................ 12/5/94 26,250 $ 2.00 $ 3.21 $ 2.00 78 months
12/5/94 52,500 $ 2.00 $ 5.00 $ 2.00 94 months
Jeanette Nostra-Katz................. 12/5/94 20,000 $ 2.00 $ 5.00 $ 2.00 105 months
12/5/94 6,300 $ 2.00 $ 4.40 $ 2.00 77 months
12/5/94 26,250 $ 2.00 $ 5.00 $ 2.00 94 months
12/5/94 21,000 $ 2.00 $ 7.62 $ 2.00 96 months
12/31/92 10,500 $ 7.62 $10.83 $ 7.62 84 months
12/31/92 10,500 $ 7.62 $12.38 $ 7.62 84 months
Keith S. Jones....................... 12/5/94 7,875 $ 2.00 $ 4.40 $ 2.00 90 months
12/5/94 5,250 $ 2.00 $ 5.00 $ 2.00 61 months
12/5/94 5,250 $ 2.00 $ 7.62 $ 2.00 95 months
12/5/94 20,000 $ 2.00 $ 4.25 $ 2.00 108 months
12/31/92 5,250 $ 7.62 $12.38 $ 7.62 84 months
</TABLE>
(table continued on next page)
11
<PAGE>
(table continued from previous page)
<TABLE>
<CAPTION>
LENGTH OF
ORIGINAL
MARKET PRICE OPTION TERM
NUMBER OF OF STOCK AT EXERCISE PRICE REMAINING AT
OPTIONS TIME OF AT TIME OF NEW DATE OF
REPRICED OR REPRICING OR REPRICING OR EXERCISE REPRICING OR
NAME DATE AMENDED AMENDMENT AMENDMENT PRICE AMENDMENT
- - ------------------------------------- -------- ----------- ------------ -------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Alan Feller.......................... 12/5/94 7,875 $ 2.00 $ 4.40 $ 2.00 77 months
12/5/94 10,500 $ 2.00 $ 5.00 $ 2.00 61 months
12/5/94 10,500 $ 2.00 $ 7.62 $ 2.00 96 months
12/31/92 10,500 $ 7.62 $12.50 $ 7.62 84 months
Carl Katz............................ 12/5/94 6,300 $ 2.00 $ 4.40 $ 2.00 77 months
12/5/94 10,500 $ 2.00 $ 5.00 $ 2.00 94 months
12/5/94 21,000 $ 2.00 $ 7.62 $ 2.00 96 months
12/31/92 10,500 $ 7.62 $10.83 $ 7.62 84 months
12/31/92 10,500 $ 7.62 $12.38 $ 7.62 84 months
Fran Boller-Krakauer ................ 12/5/94 1,575 $ 2.00 $ 4.40 $ 2.00 77 months
Vice President- 12/5/94 2,625 $ 2.00 $ 5.00 $ 2.00 62 months
Men's Sales of G-III Leather 12/5/94 1,575 $ 2.00 $ 7.62 $ 2.00 96 months
Fashions, Inc. 12/5/94 5,000 $ 2.00 $ 8.00 $ 2.00 101 months
12/31/92 1,575 $ 7.62 $12.38 $ 7.62 84 months
Deborah Huffman ..................... 12/5/94 6,300 $ 2.00 $ 4.40 $ 2.00 77 months
Vice President- 12/5/94 5,250 $ 2.00 $ 5.00 $ 2.00 94 months
Women's Sales of G-III 12/5/94 7,875 $ 2.00 $ 7.62 $ 2.00 96 months
Leather Fashions, Inc. 12/31/92 7,875 $ 7.62 $12.38 $ 7.62 84 months
Karen Wells ......................... 12/5/94 6,300 $ 2.00 $ 4.40 $ 2.00 77 months
Vice President- 12/5/94 5,250 $ 2.00 $ 5.00 $ 2.00 94 months
Fashion Design and 12/5/94 3,150 $ 2.00 $ 7.62 $ 2.00 96 months
Imports of G-III Leather 12/31/92 3,150 $ 7.62 $12.38 $ 7.62 84 months
Fashions, Inc.
</TABLE>
For an explanation regarding the repricing of stock options effected in
fiscal 1995, see 'Compensation Committee Report on Executive
Compensation -- Repricing of Stock Options.'
EMPLOYMENT AGREEMENTS
The Company has an employment agreement with Morris Goldfarb effective
through January 31, 1996. The agreement renews annually unless either party
notifies the other of its or his intent not to renew within 90 days of the
scheduled termination date thereof. The agreement provides for a base annual
salary of $650,000, with increases at the discretion of the Board of Directors.
Mr. Goldfarb is currently being paid at the rate of $495,000 per year pursuant
to his voluntarily agreeing to a reduction in salary. The agreement also
provides for a $2,000,000 life insurance policy which names Mr. Goldfarb's wife
as beneficiary and an annual incentive bonus equal to varying percentages of
pre-tax income (as defined in the employment agreement) if pre-tax income
exceeds $2,000,000. The percentages vary from 3% of pre-tax income in excess of
$2,000,000 up to 6% of pre-tax income in excess of $2,000,000 if pre-tax income
exceeds $4,000,000. Pursuant to the agreement, the Company will contribute
$50,000 per year to a supplemental pension trust for Mr. Goldfarb's benefit for
each year in which net after-tax income (as defined in the employment agreement)
exceeds $1,500,000. In addition, pursuant to the employment agreement, in the
event that Morris Goldfarb's employment is
12
<PAGE>
terminated (i) by the Company without cause or (ii) by Morris Goldfarb because
of a material breach by the Company of the agreement, in either case at any time
after a 'Change in Control' (as defined in the agreement), then Mr. Goldfarb
will be entitled to receive from the Company, in general, (a) an amount equal to
2.99 times his base salary and bonus, as well as (b) certain employment-related
benefits for a period of three years from the date of his termination.
The Company has a severance agreement with Aron Goldfarb which provides for
the termination of Aron Goldfarb's employment with the Company, effective
January 1, 1995, and for the payment for the two-year period commencing on
January 1, 1995 (the 'Severance Period') of base annual payments of $125,000,
payable in accordance with the Company's customary payroll policy. Pursuant to
the agreement, during the Severance Period, the Company will continue to provide
Aron Goldfarb with medical insurance and certain other enumerated benefits.
Additionaly, Mr. Goldfarb acts a consultant to the Company and is paid at the
rate of $1,000 per month for services rendered in such capacity.
The Company has an employment agreement with Alan Feller, providing for the
payment to Mr. Feller of a base annual salary of $160,000. Mr. Feller is
currently being paid at the rate of $180,000 per year. The agreement also
provides for the continued payment to Mr. Feller of his salary for a period of
one year (or until Mr. Feller gains satisfactory comparable employment, if a
lesser period), in the event he is terminated for other than 'cause' (as
specified in the agreement).
COMPENSATION OF DIRECTORS
Directors who are not employees or consultants of the Company receive
$5,000 per year, in addition to $500 for each meeting of the Board attended and
$500 for each meeting of each Committee of the Board attended, plus
reimbursement of reasonable out-of-pocket expenses incurred in connection with
attendance at Board of Directors' meetings.
Non-Employee Directors Plan
Pursuant to the Non-Employee Directors Plan, the Company automatically
grants options on an annual basis to members of its Board of Directors who are
not also employees of, or consultants to, the Company (a 'Non-Employee
Director'). A maximum of 30,000 shares of Common Stock may be issued under the
Non-Employee Directors Plan. Each Non-Employee Director is automatically granted
an option to purchase 1,000 shares of the Company's Common Stock on the day
after each annual meeting of the Company's stockholders (each, a 'Grant Date').
All options are exercisable at a per share exercise price equal to the closing
sales price of a share of Common Stock on the Grant Date. The Plan will
terminate on June 25, 2001, unless sooner terminated by the Board.
In general, an option granted under the Non-Employee Directors Plan becomes
exercisable in equal increments of 200 shares on each of the first through fifth
anniversaries of the date the option is granted, and subject to the foregoing,
may be exercised during the ten-year period from the date the option is granted.
However, a Non-Employee Director who ceases to perform services for the Company
will have three months (one year in the case of termination by reason of death
or total disability) to exercise his or her options -- but only to the extent
otherwise exercisable under the vesting schedule.
The Non-Employee Directors Plan is administered by the Board of Directors
of the Company. The Board of Directors may amend the Non-Employee Directors
Plan, except that, in general, any amendment which would increase the aggregate
number of shares of Common Stock as to which options may be granted under the
Plan, materially increase the benefits under the Plan, or modify the
13
<PAGE>
class of persons eligible to receive options under the Plan, requires the
approval of the Company's stockholders.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
General. The Compensation Committee, consisting of Thomas J. Brosig and
Sigmund Weiss, was established in March 1994. Prior to the establishment of the
Compensation Committee, the Board of Directors administered the Company's
executive compensation programs, monitored corporate performance and its
relationship to compensation of executive officers, and made appropriate
decisions concerning matters of executive compensation. The Company's
compensation policies have evolved over the years since the Company's initial
public stock offering in December 1989. At the time of the public offering and
periodically since then, the compensation levels of the Company's executive
officers were reviewed and compared to officers of other publicly held apparel
companies. The Company adopted the 1989 Plan in 1989 and increased the number of
shares subject to the 1989 Plan in January 1992 and June 1994. The Plan is
administered by the Option Committee, which is composed of Willem van Bokhorst
and George J. Winchell.
One of the Company's strengths is a strong management team. The
compensation program is designed to enable the Company to attract, retain and
reward capable employees who contribute to the Company's success. Equity
participation and a strong alignment to stockholders' interests are key elements
of the Company's compensation philosophy. The Company's executive compensation
policies are intended to (i) attract and retain the most highly qualified
managerial and executive talent; (ii) afford appropriate incentives to produce
superior performance; (iii) emphasize sustained performance by aligning rewards
with stockholder interests; (iv) motivate executives and employees to achieve
the Company's annual and long-term business goals; and (v) reward executives for
superior individual contributions to the Company. To implement these policies,
the Board designed an executive compensation program consisting, in general, of
base salary, annual performance-based bonus plan and stock options.
Base Salary. Base salaries reflect individual responsibilities, experience,
leadership and contribution to the success of the Company. Annual salary
adjustments have previously been determined by evaluating the performance of the
executive and any increased responsibilities assumed by the executive, the
performance of the Company and the competitive marketplace. Salary adjustments
have previously been determined and normally made on an annual basis. During the
fiscal year ended January 31, 1995 ('fiscal 1995'), however, the Company reduced
the salaries of its mid-level and senior executives in connection with a review
of operating expenses in light of the difficult business climate faced by the
Company. The Company intends to review salary levels during the course of the
current fiscal year and may consider restoring the salary reductions made based
on the Company's future performance.
Annual Bonuses and Incentive Compensation Program. Historically, the
Company's executives, other than Morris Goldfarb, were eligible to receive a
discretionary bonus, determined by Mr. Goldfarb, based on an evaluation of
individual performance and overall Company earnings. No such bonuses were paid
with respect to fiscal 1995. The Compensation Committee, after consultation with
the Board of Directors, has determined that a bonus plan with specified goals
and objectives will better serve the Company's needs. Accordingly, commencing
with the current fiscal year ending January 31, 1996, the Company's executive
officers, other than Morris Goldfarb, will be entitled to receive an annual
bonus under a new Incentive Compensation Program. Under this program, bonuses
for merchandise division
14
<PAGE>
officers and key personnel will be based 50% on targeted division performance
and 50% on targeted overall Company performance, while bonuses for
administrative officers and key personnel will be based solely on targeted
overall Company performance. Officers will be entitled to bonuses of up to 15%
of base salary if targets are met and up to 20% of base salary if targets are
exceeded by at least 25%. The purpose of this new program is to more directly
and objectively incentivize and reward key personnel. Mr. Goldfarb has a
performance-based incentive bonus provision in his employment agreement. This
incentive provision is intended to recognize Mr. Goldfarb's unique role in
overall management and corporate strategy and provide incentive compensation
based on overall performance by the Company.
Stock Options. The Compensation Committee endorses the position that equity
ownership by management is beneficial in aligning management's and stockholders'
interests in the enhancement of stockholder value and, accordingly, endorses the
stock option plan currently in place. Stock option awards have generally vested
ratably over a five-year period, providing a long-term view and incentives tied
to growth in stockholder values. The Committee strongly believes that the
compensation program should provide employees with an opportunity to increase
their ownership and potentially gain financially from Company stock price
increases. By this approach, the best interests of stockholders, executives and
employees will be closely aligned.
The Committee believes that the use of stock options as the basis for
long-term incentive compensation meets the Company's compensation strategy and
business needs of the Company by achieving increased value for stockholders and
retaining key employees. The Committee intends to work closely with the Option
Committee to achieve these goals.
Repricing of Stock Options. As previously stated, the Option Committee
strongly believes in the importance of stock options in providing incentives to
key employees. Stock options are granted to help retain the sevices of those
individuals who are in a position to contribute to the successful conduct and
operation of the Company and provide incentives by increasing their personal
stake in the success of the Company.
As a result of the decline in the price of the Company's Common Stock, as
1994 progressed, all of the outstanding stock options held by the key employees
of the Company had exercise prices in excess of the market value of the Common
Stock. Accordingly, these stock options no longer provided employees with the
incentives originally expected and desired by the Company. The Option Committee
believed that these individuals continue to positively contribute to the Company
and have served the Company well, particularly in light of the difficult
economic conditions faced by the Company, and that the decline in the Company's
stock price is not necessarily reflective of the performance of these employees.
In December 1994, after careful consideration and consultation with the full
Board of Directors, the Option Committee authorized the repricing of all
outstanding options granted under the 1989 Plan to an exercise price of $2.00
per share, the market price of the Common Stock on December 5, 1994, the date of
the Committee's action. All other terms and conditions of these repriced stock
options, including their vesting schedules, remain unchanged.
<TABLE>
<S> <C>
COMPENSATION COMMITTEE OPTION COMMITTEE
Thomas J. Brosig Willem van Bokhorst
Sigmund Weiss George J. Winchell
</TABLE>
15
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Morris Goldfarb, President, Chief Executive Officer and director of the
Company is a director of Grand Casinos, Inc. Thomas J. Brosig is a director of
Grand Casinos, Inc. and is also its Executive Vice President. Mr. Brosig served
as Executive Vice President of Administration and Finance of the Company from
August 1989 through March 1990.
COMPARATIVE PERFORMANCE BY THE COMPANY
The Securities and Exchange Commission requires the Company to present a
chart comparing the cumulative total stockholder return on its Common Stock with
the cumulative total stockholder return of (i) a broad equity market index and
(ii) a published industry index or peer group. This chart compares the Common
Stock with (i) the S&P 500 Composite Index and (ii) the S&P Textiles Index, and
assumes an investment of $100 on January 31, 1990 in each of the Common Stock,
the stocks comprising the S&P 500 Composite Index and the stocks comprising the
S&P Textile Index.
G-III APPAREL GROUP, LTD.
COMPARISON OF CUMULATIVE TOTAL RETURN
(JANUARY 31, 1990 - JANUARY 31, 1995)
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
VALUE AT G-III S&P 500 S&P TEXTILE
DECEMBER 31 COMMON STOCK INDEX INDEX
- - ----------- ------------ ------- -----------
<S> <C> <C> <C>
1990...... $100 $100 $100
1991...... 35.71 95.74 106.12
1992...... 48.21 122.38 144.49
1993...... 67.86 128 149.33
1994...... 28.57 139.12 105.11
1995...... 11.61 138.36 102.82
</TABLE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
To the Company's knowledge, the Company's directors, executive officers and
beneficial owners of more than ten percent of the Company's Common Stock are in
compliance with the reporting requirements of Section 16(a) under the Securities
Exchange Act of 1934, as amended. Due to certain miscommunications, the
Company's directors and executive officers inadvertently filed their respective
Forms 5, reporting the repricing of all existing stock options granted under the
Company's 1989 Plan and certain additional grants, one business day after the
Forms were due.
16
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In September 1986, the New York City Industrial Development Agency ('IDA')
issued $1,442,000 of floating rate Industrial Development Revenue Bonds to a
commercial bank for the purpose of acquiring and renovating real property
located at 345 West 37th Street in New York City (the '345 Property').
Simultaneously, the IDA leased the 345 Property for a term of 15 years to 345
West 37th Corp. ('345 Corp.'), a company owned and managed by Morris and Aron
Goldfarb, for sublease to a subsidiary of the Company as its headquarters.
Monthly rental payments are due under the sublease in an amount equal to the
aggregate of all amounts due under the bonds (including principal, redemption
premium, if any, and interest), plus real estate taxes and building operating
expenses. Two of the Company's subsidiaries and Morris and Aron Goldfarb
(collectively, the 'Guarantors'), have jointly and severally guaranteed the
payments and obligations under the lease and the payment of principal and
interest on the bonds.
In April 1988, 345 Corp. received a loan in the principal amount of
$1,153,000 from the New York Job Development Authority (the 'Authority'), to
assist 345 Corp. in its renovation of the 345 Property. The loan, which is
financed by long-term bonds issued by the Authority, is for a period of 15 years
and is repayable in principal installments of $10,689 monthly, plus interest at
a variable rate, not to exceed 1 1/2% above the Authority's cost of the funds
loaned. At January 31, 1995, the interest rate on and the outstanding principal
amount of the loan were 8.25% and approximately $797,000, respectively. Each of
the Guarantors has guaranteed the loan.
Each of Morris Goldfarb and Aron Goldfarb have jointly and severally
guaranted up to $2.5 million of the Company's bank debt. In consideration for
these guarantees, the Company granted to each of Morris Goldfarb and Aron
Goldfarb ten-year options to purchase 25,000 shares of Common Stock at $5.50 per
share and 25,000 shares of Common Stock at $6.50 per share. One-half of the
options at each price are currently exercisable and the balance of the options
have expired by their terms. Additionally, Morris Goldfarb has pledged 250,000
shares of the Common Stock owned by him as additional security for the Company's
bank debt.
PROPOSAL NO. 2 -- RATIFICATION OF APPOINTMENT
OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The stockholders will be asked to ratify the appointment of Grant Thornton
LLP as the independent certified public accountants of the Company for the
fiscal year ending January 31, 1996. Grant Thornton LLP audited the financial
statements of the Company for the fiscal year ended January 31, 1995. A
representative of Grant Thornton LLP is expected to be present at the Annual
Meeting, will have an opportunity to make a statement if he desires to do so and
is expected to be available to respond to appropriate questions from
stockholders.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 2 TO BE IN THE BEST INTERESTS OF
THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE 'FOR' APPROVAL THEREOF.
STOCKHOLDER PROPOSALS
All stockholder proposals which are intended to be presented at the Annual
Meeting of Stockholders of the Company to be held in 1996 must be received by
the Company no later than
17
<PAGE>
January 30, 1996 for inclusion in the Board of Directors' proxy statement and
form of proxy relating to that meeting.
OTHER BUSINESS
The Board of Directors knows of no other business to be acted upon at the
Annual Meeting. However, if any other business properly comes before the Annual
Meeting, it is the intention of the persons named in the enclosed proxy to vote
on such matters in accordance with their best judgment.
The prompt return of your proxy will be appreciated and helpful in
obtaining the necessary vote. Therefore, whether or not you expect to attend the
Annual Meeting, please sign the proxy and return it in the enclosed envelope.
By Order of the Board of Directors
ALAN FELLER
Secretary
Dated: May 30, 1995
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K WILL BE SENT WITHOUT
CHARGE TO ANY STOCKHOLDER REQUESTING IT IN WRITING FROM: G-III APPAREL GROUP,
LTD., ATTENTION: CORPORATE SECRETARY, 345 WEST 37TH STREET, NEW YORK, NEW YORK
10018.
18
<PAGE>
APPENDIX 1
G-III APPAREL GROUP, LTD.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 22, 1995
The undersigned, a stockholder of G-III Apparel Group, Ltd. (the
'Corporation'), hereby constitutes and appoints Morris Goldfarb, Aron Goldfarb
and Alan Feller and each of them, the true and lawful proxies and
attorneys-in-fact of the undersigned, with full power of substitution in each of
them, to vote all shares of Common Stock of the Corporation which the
undersigned is entitled to vote at the Annual Meeting of Stockholders of the
Corporation to be held on Thursday, June 22, 1995, and at any and all
adjournments or postponements thereof, as follows:
1. ELECTION OF DIRECTORS
<TABLE>
<S> <C>
[ ] FOR the nominees listed below (except as [ ] WITHHOLDING AUTHORITY to vote for
marked to the contrary below) all the nominees listed below
</TABLE>
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below.)
Nominees: Morris Goldfarb, Aron Goldfarb, Lyle Berman, Thomas J. Brosig, Alan
Feller, Carl Katz, Willem van Bokhorst, Sigmund Weiss and George J.
Winchell
2. PROPOSAL TO RATIFY THE APPOINTMENT OF GRANT THORNTON LLP
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion upon such other business as may properly come before
the meeting and any and all adjournments and postponements thereof.
(Continued on reverse side.)
<PAGE>
(Continued)
Shares represented by this Proxy will be voted in accordance with the
instructions indicated in items 1 and 2 above. IF NO INSTRUCTION IS INDICATED,
THIS PROXY WILL BE VOTED FOR ALL LISTED NOMINEES FOR DIRECTORS AND FOR PROPOSAL
2.
Any and all proxies heretofore given by the undersigned are hereby revoked.
Dated: ______________________
_____________________________
_____________________________
Please sign exactly as your
name(s) appear hereon. If
shares are held by two or
more persons each should
sign. Trustees, executors and
other fiduciaries should
indicate their capacity.
Shares held by corporations,
partnerships, associations,
etc. should be signed by an
authorized person, giving
full title or authority.
PLEASE DATE, SIGN AND MAIL IN THE ENCLOSED REPLY ENVELOPE
