SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement
(Pursuant to Section 14(a) of the Securities Exchange Act
of 1934)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
BISCAYNE APPAREL, INC.
(Name of Registrant as specified in its Charter)
BISCAYNE APPAREL, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
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
(4) Proposed maximum aggregate value of transaction:
[ ] 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 No.:
(3) Filing Parties:
(4) Date Filed:
BISCAYNE APPAREL, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 24, 1995
To the shareholders of
Biscayne Apparel, Inc.
NOTICE IS HEREBY GIVEN that the 1995 Annual Meeting of
Shareholders of Biscayne Apparel, Inc., a Florida corporation (the
"Company"), will be held at 9:00 a.m., local time, on Wednesday,
May 24, 1995, at the Grand Bay Hotel, 2669 South Bayshore Drive,
Miami, Florida, for the following purposes:
(1) To elect ten members to the Company's Board of
Directors to hold office until their terms shall expire
or until their successors are duly elected and
qualified;
(2) To consider and vote upon a proposal to approve the
adoption of the Company's 1994 Stock Option Plan; and
(3) To transact such other business as may properly come
before the meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on
April 3, 1995 as the record date for determining those shareholders
entitled to notice of, and to vote at, the Annual Meeting and any
adjournments thereof.
Whether or not you expect to be present, please sign, date
and return the enclosed proxy card in the enclosed pre-addressed
envelope as promptly as possible. No postage is required if mailed
in the United States.
By Order of the Board of Directors,
Peter W. Klein
Secretary
Clifton, New Jersey
April 24, 1995
THIS IS AN IMPORTANT MEETING AND ALL SHAREHOLDERS ARE INVITED TO
ATTEND THE MEETING IN PERSON. THOSE SHAREHOLDERS WHO ARE UNABLE TO
ATTEND ARE RESPECTFULLY URGED TO EXECUTE AND RETURN THE ENCLOSED
PROXY CARD AS PROMPTLY AS POSSIBLE. SHAREHOLDERS WHO EXECUTE A
PROXY CARD MAY NEVERTHELESS ATTEND THE MEETING, REVOKE THEIR PROXY
AND VOTE THEIR SHARES IN PERSON.
ANNUAL MEETING OF SHAREHOLDERS
OF
BISCAYNE APPAREL, INC.
PROXY STATEMENT
DATE, TIME AND PLACE OF ANNUAL MEETING
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of Biscayne Apparel, Inc.,
a Florida corporation (the "Company"), of proxies from the holders
of the Company's Common Stock, par value $0.01 per share (the
"Common Stock"), for use at the 1995 Annual Meeting of Shareholders
of the Company, to be held on the 24th day of May, 1995, or any
adjournment(s) thereof (the "Annual Meeting"), pursuant to the
enclosed Notice of Annual Meeting. The approximate date this Proxy
Statement and the enclosed form of proxy are first being sent to
holders of Common Stock is April 24, 1995. The complete mailing
address, including zip code, of the principal executive offices of
the Company is 1373 Broad Street, Clifton, New Jersey 07013.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Board of
Directors of the Company. The giving of a proxy does not preclude
the right to vote in person should any shareholder giving the proxy
so desire. Shareholders have an unconditional right to revoke
their proxy at any time prior to the exercise thereof, either in
person at the Annual Meeting or by filing with the Secretary of the
Company at the Company's headquarters a written revocation or duly
executed proxy bearing a later date; however, no such revocation
will be effective until written notice of the revocation is
received by the Company at or prior to the Annual Meeting.
The cost of preparing, assembling and mailing this Proxy
Statement, the Notice of Annual Meeting of Shareholders and the
enclosed proxy is to be borne by the Company. In addition to the
use of mail, employees of the Company may solicit proxies
personally and by telephone and facsimile. They will receive no
compensation therefor in addition to their regular salaries.
Arrangements will be made with banks, brokers and other custodians,
nominees and fiduciaries to forward copies of the proxy material to
their principals and to request authority for the execution of
proxies. The Company will reimburse such persons for their
expenses in so doing.
PURPOSES OF THE MEETING
At the Annual Meeting, the Company's shareholders will
consider and vote upon the following matters:
1. The election of ten directors to serve until the next
Annual Meeting of Shareholders or until their
successors are duly elected and qualified;
2. To consider and vote upon a proposal to approve the
adoption of the Company's 1994 Stock Option Plan; and
3. Such other business as may properly come before the
Annual Meeting, including any adjournments thereof.
Unless contrary instructions are indicated on the enclosed
proxy, all shares represented by valid proxies received pursuant to
this solicitation (and which have not been revoked in accordance
with the procedures set forth above) will be voted (i) FOR the
election of the ten nominees for director named below, (ii) FOR the
proposal to approve the adoption of the Company's 1994 Stock Option
Plan, and (iii) in favor of all other proposals as may properly
come before the Annual Meeting. In the event a shareholder
specifies a different choice by means of the enclosed proxy, his
shares will be voted in accordance with the specification so made.
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors has set the close of business on
April 3, 1995 (the "Record Date"), as the record date for
determining shareholders of the Company entitled to notice of and
to vote at the Annual Meeting. As of the Record Date there were
10,224,227 shares of Common Stock issued and outstanding, all of
which are entitled to be voted at the Annual Meeting. Holders of
Common Stock are entitled to one vote per share on each matter that
is submitted to shareholders for approval.
The attendance, in person or by proxy, of the holders of
shares of Common Stock representing a majority of the outstanding
shares of such stock is necessary to constitute a quorum. For
purposes of electing directors at the Annual Meeting, the nominees
receiving the greatest number of votes of Common Stock shall be
elected as directors. The affirmative vote of a majority of the
shares of Common Stock present in person or by proxy at the Annual
Meeting is required for the approval of the adoption of the
Company's 1994 Stock Option Plan and for any other matter that may
be submitted to vote of the shareholders. Abstentions are
considered as shares present and entitled to vote for purposes of
determining the presence of a quorum and for purposes of
determining the outcome of any matter submitted to the shareholders
for a vote, but are not counted as votes "for" or "against" any
matter. The inspectors of election will treat shares referred to
as "broker or nominee non-votes" (shares held by brokers or
nominees as to which instructions have not been received from the
beneficial owners or persons entitled to vote and the broker or
nominee does not have discretionary voting power on a particular
matter) as shares that are present and entitled to vote for
purposes of determining the presence of a quorum. For purposes of
determining the outcome of any matter as to which the proxies
reflect broker or nominee non-votes, shares represented by such
proxies will be treated as not present and not entitled to vote on
that subject matter and therefore will not be considered by the
inspectors of election when counting votes cast on the matter (even
though those shares are considered entitled to vote for quorum
purposes and may be entitled to vote on other matters.) If less
than a majority of the outstanding shares of Common Stock are
represented at the Annual Meeting, a majority of the shares so
represented may adjourn the Annual Meeting from time to time
without further notice.
SECURITY OWNERSHIP
The following table sets forth information with respect to
the beneficial ownership of the Company's Common Stock as of the
Record Date by (a) each person known to the Company to own
beneficially more than 5 percent of the Company's outstanding
Common Stock, (b) each director (including nominees) who owns any
such shares, (c) each Named Executive Officer (see "Executive
Compensation and Other Information--Summary of Cash and Certain
Other Compensation"), and (d) the directors and executive officers
of the Company as a group:
<TABLE>
<CAPTION>
<S> <C>
Common Stock
Name and Address of Beneficially Owned(2)
Beneficial Owner(1) Shares Percent
Trivest Special Situations Fund
1985, L.P.(3). . . . . . . . . . 1,674,130 16.4%
Earl W. Powell(4). . . . . . . . 633,964 6.2%
Phillip T. George, M.D(5). . . . 616,147 6.0%
John E. Pollack(6) . . . . . . . 184,560 1.8%
Peter Vandenberg, Jr.(7) . . . . 44,740 *
John W. Partridge(8) . . . . . . 147,520 1.4%
Lewis A. Engman(9) . . . . . . . 71,136 *
James J. Pinto(10) . . . . . . . 26,353 *
Harold E. Berritt(11). . . . . . 3,150 *
Joseph B. Gildenhorn (12). . . . 72,450 *
Kurt C. Gutfreund (13) . . . . . 395,754 3.9%
Directors and executive officers
as a group (11 persons)(14). . 3,885,129 36.7%
</TABLE>
* Less than 1%.
(1) Unless otherwise indicated, the address of each of the
beneficial owners identified is 2665 South Bayshore Drive,
Suite 800, Miami, Florida 33133.
(2) Unless otherwise indicated, each person or group has sole
voting and investment power with respect to all such shares.
For purposes of this table, a person is deemed to have
"beneficial ownership" of any shares as of a given date which
the person has the right to acquire within 60 days after such
date. For purposes of computing the outstanding shares held
by each person named above on a given date, any shares which
such person has the right to acquire within 60 days after
such date is deemed to be outstanding, but is not deemed to
be outstanding for the purpose of computing the percentage
ownership of any other person.
(3) Trivest Special Situations Fund 1985, L.P. ("TSSF") is a
Delaware limited partnership of which Trivest Associates,
L.P., a Delaware limited partnership ("Associates"), is
general partner. The general partner of Associates is
Trivest, Inc., a Delaware corporation ("Trivest"), whose
shares are owned by Messrs. George and Powell. Blue Sky
Partners, a Florida general partnership whose partners are
Messrs. George and Powell; Messrs. Pinto and Powell; Dr.
George and his spouse; and Mr. Pollack's spouse are limited
partners of TSSF. In addition, Messrs. George, Pinto and
Powell are limited partners of Associates.
(4) Includes (i) 527,914 shares of Common Stock directly owned;
and (ii) 52,500 shares of Common Stock issuable upon exercise
of presently exercisable options granted pursuant to the
Company's 1987 Stock Option Plan; and (iii) 6,300 shares of
Common Stock issuable upon exercise of presently exercisable
options granted pursuant to the Company's Amended and
Restated 1990 Stock Option Plan, and (iv) 47,250 shares of
Common Stock owned beneficially and of record by Trivest.
Does not include shares indicated as owned of record by TSSF
(see footnote 3 above) or 141,750 shares of restricted stock
owned beneficially and of record by Trivest.
(5) Includes (i) 488,677 shares of Common Stock directly owned;
and (ii) 49,770 shares of Common Stock held of record by Dr.
George as custodian for his minor children under the Florida
Uniform Gift to Minors Act, as to which Dr. George disclaims
beneficial ownership; and (iii) 24,674 shares of Common Stock
issuable upon exercise of presently exercisable options
granted pursuant to the Company's 1987 Stock Option Plan; and
(iv) 5,776 shares of Common Stock issuable upon exercise of
presently exercisable options granted pursuant to the
Company's Amended and Restated 1990 Stock Option Plan, and
(v) 47,250 shares of Common Stock owned beneficially and of
record by Trivest. Does not include shares indicated as
owned of record by TSSF (see footnote 3 above) or 141,750
shares of restricted stock owned beneficially and of record
by Trivest.
(6) Includes (i) 68,250 shares of Common Stock directly owned;
(ii) 72,210 shares of Common Stock beneficially owned by Mr.
Pollack's spouse and as to which Mr. Pollack disclaims
beneficial ownership; (iii) 15,750 shares of Common Stock
issuable upon exercise of presently exercisable options
granted pursuant to the Company's 1987 Stock Option Plan; and
(iv) 28,350 shares of Common Stock issuable upon exercise of
presently exercisable options granted pursuant to the
Company's Amended and Restated 1990 Stock Option Plan. Does
not include (i) shares indicated as owned of record by TSSF
(see footnote 3 above); or (ii) 1,785 shares of Common Stock
held for Mr. Pollack's benefit under the Andy Johns Fashions
Profit Sharing Plan and Trust. Mr. Pollack's address is 1373
Broad Street, Clifton, New Jersey 07013.
(7) Includes (i) 16,740 shares of Common Stock directly owned;
and (ii) 22,750 shares of Common Stock issuable upon exercise
of presently exercisable options granted pursuant to the
Company's 1987 Stock Option Plan; and (ii) 5,250 shares of
Common Stock issuable upon exercise of presently exercisable
options granted pursuant to the Company's Amended and
Restated 1990 Stock Option Plan. Mr. Vandenberg's address
is 1373 Broad Street, Clifton, New Jersey 07013.
(8) Includes (i) 16,868 shares of Common Stock directly owned;
(ii) 127,502 shares of Common Stock issuable upon exercise of
presently exercisable options granted pursuant to the
Company's 1987 Stock Option Plan; and (iii) 3,150 shares of
Common Stock issuable upon exercise of presently exercisable
options granted pursuant to the Company's Amended and
Restated 1990 Stock Option Plan.
(9) Includes (i) 46,986 shares of Common Stock directly owned;
and (ii) 24,150 shares of Common Stock issuable upon exercise
of presently exercisable options granted pursuant to the
Company's Amended and Restated 1990 Stock Option Plan. Mr.
Engman's address is 1620 I Street, N.W., Washington, D.C.
20006-4062.
(10) Includes (i) 2,203 shares of Common Stock directly owned; and
(ii) 24,150 shares of Common Stock issuable upon exercise of
presently exercisable options granted pursuant to the
Company's Amended and Restated 1990 Stock Option Plan. Mr.
Pinto's address is 235 Sunrise Highway, Suite 3224, Palm
Beach, Florida 32480.
(11) The number of shares of Common Stock includes 3,150 shares of
Common Stock issuable upon exercise of presently exercisable
options granted pursuant to the Company's Amended and
Restated 1990 Stock Option Plan. Mr. Berritt's address is 410
Park Avenue, New York, New York 10022.
(12) Includes 72,450 shares directly owned. Mr. Gildenhorn's
address is 1250 Connecticut Avenue, NW, Washington, DC 20036.
(13) Includes 37,822 shares of Common Stock held in escrow to
secure certain indemnification obligations of Mr. Gutfreund
incurred in connection with the Company's acquisition of M&L
International, Inc. Mr. Gutfreund's address is 1333 North
Kingsbury Street, Chicago, Illinois 60622.
(14) Includes shares owned of record by TSSF and shares
beneficially owned by directors and executive officers, as
described in footnotes 4,5,6,7, 8,9,10,11,12 and 13 above.
The number of shares of Common Stock also includes an
aggregate of 15,225 shares beneficially owned by Mr. Klein,
the Company's Vice President, General Counsel and Secretary,
which consists of (i) 13,125 shares issuable upon the
exercise of presently exercisable options granted pursuant to
the Company's 1987 Stock Option Plan, and (ii) 2,100 shares
issuable upon exercise of presently exercisable options
granted pursuant to the Company's Amended and Restated 1990
Stock Option Plan. Does not include 141,750 shares of
restricted stock owned beneficially and of record by Trivest.
ELECTION OF DIRECTORS
Nominees
The Company's Amended and Restated Articles of Incorporation
provide that the number of directors constituting the Company's
Board of Directors shall consist of not less than three nor more
than ten members, the exact number of directors to be determined
from time to time by resolution adopted by the Board of Directors.
The Company's Bylaws provide that the number of directors shall be
fixed from time to time, within the limits specified by the
Articles of Incorporation, by resolution of the Board of Directors.
The Board of Directors has fixed at ten the number of directors
that will constitute the Board for the ensuing year. Each director
elected at the Annual Meeting will serve for a term expiring at the
1996 Annual Meeting of Shareholders, expected to be held in May
1996, or until his successor has been duly elected and qualified.
Each of the incumbent directors has been nominated as a director to
be elected at the Annual Meeting by the holders of Common Stock and
proxies will be voted for such persons absent contrary
instructions.
The Board of Directors has no reason to believe that any
nominee will refuse to act or be unable to accept election;
however, in the event that a nominee for a directorship is unable
to accept election or if any other unforeseen contingencies should
arise, it is intended that proxies will be voted for the remaining
nominees and for such other person as may be designated by the
Board of Directors, unless it is directed by a proxy to do
otherwise.
Each of the nominees for election as a director of the
Company is a current member of the Board of Directors. Messrs
Powell, Pinto and George have served as directors since 1985, Mr.
Engman has served as a director since 1986, Mr. Partridge has
served as a director since 1987, Mr. Pollack has served as a
director since September 1991, Mr. Berritt has served as a director
since 1993, Mr. Gildenhorn and Mr. Vandenberg have served as
directors since November 1994 and Mr. Gutfreund has served as a
director since December 1994.
MANAGEMENT
Directors and Executive Officers
<TABLE>
<CAPTION>
<S> <C> <C>
NAME AGE POSITION(S) HELD WITH THE COMPANY
Earl W. Powell . . 56 Chairman of the Board
Phillip T. George,
M.D.. . . . . . . 55 Vice Chairman of the Board
John E. Pollack. . 50 President, Chief Executive Officer
and Director
Peter Vandenberg,
Jr.. . . . . . . . 40 Vice President, Treasurer, Chief
Financial Officer and Director
Peter W. Klein . . 39 Vice President, General Counsel and
Secretary
Harold E. Berritt. 59 Director
Lewis A. Engman. . 59 Director
Joseph B.
Gildenhorn . . . . 65 Director
Kurt C. Gutfreund. 57 Director
John W. Partridge. 66 Director
James J. Pinto . . 44 Director
</TABLE>
Mr. Powell has served as Chairman of the Board of the Company
since October 1985. He served as President and Chief Executive
Officer of the Company at various times since October 1985. He
resigned as Chief Executive Officer in March 1995 in connection
with the appointment of Mr. Pollack to that position. Since May
1984, Mr. Powell has served as Chairman of Atlantis Plastics, Inc.,
an American Stock Exchange company whose subsidiaries are engaged
in the plastics industry ("Atlantis"). Mr. Powell served as Chief
Executive Officer of Atlantis from May 1984 to February 1995 and as
President of Atlantis from November 1993 to February 1995. Mr.
Powell also serves as President and Chief Executive officer of
Trivest, a private investment firm formed by Messrs. Powell and
George in 1981 that specializes in management services and
acquisitions, dispositions and leveraged buyouts. Mr. Powell also
serves as Chairman of the Board of Directors of WinsLoew Furniture,
Inc., a Nasdaq National Market company formed in December 1994 by
the merger of Winston Furniture Company, Inc. and Loewenstein
Furniture Group, Inc., engaged in the manufacture of contract
seating and casual and ready-to-assemble furniture ("WinsLoew").
From 1971 until 1985, Mr. Powell was a partner with KPMG/Peat
Marwick, Certified Public Accountants ("Peat Marwick"), where his
positions included serving as managing partner of Peat Marwick's
Miami office.
Dr. George has served as a Vice Chairman of the Company since
October 1985. Dr. George also serves as Vice Chairman of Atlantis'
Board of Directors, as a director of WinsLoew, and as Chairman of
the Board of Trivest.
Mr. Pollack has served as a director and as President of the
Company and its Biscayne Apparel International, Inc. subsidiary
since September 1991. He was appointed Chief Executive Officer in
March 1995. Mr. Pollack served as an executive officer of the Andy
Johns Fashions Division of Biscayne Apparel International, Inc.
from May 1986 until September 1991 and has served as President of
Biscayne Apparel International, Inc. since September 1991. Mr.
Pollack was a founder, stockholder and director of the corporate
predecessor of Andy Johns Fashions and served as Vice President and
Chief Operating Officer of that company from its founding in 1975
until its acquisition by the Company in May 1986.
Mr. Vandenberg, a Certified Public Accountant, joined the
Company in January 1987 and has served as Vice President, Treasurer
and Chief Financial Officer since such time (except for the period
from April 1991 to September 1991, when he served as a Vice
President of the Company and as an executive officer of Trivest).
He was appointed a director of the Company in November 1994. Mr.
Vandenberg served in various capacities with Peat Marwick from
December 1977 until January 1987, and was a senior manager of that
firm from July 1984 until joining the Company.
Mr. Klein joined the Company in June 1986 and has served as
Vice President, General Counsel and Secretary since such time. Mr.
Klein has served as an executive officer and General Counsel of
Trivest since May 1986 and was appointed a Managing Director of
Trivest in January 1991. Mr. Klein has also served as Vice
President, General Counsel and Secretary of Atlantis since May
1986. Mr. Klein serves as a director of WinsLoew. Prior to
joining the Company, Mr. Klein practiced law in Chicago, Illinois
and Cleveland, Ohio.
Mr. Berritt was appointed a director of the Company in January
1993. Mr. Berritt has been a partner with the law firm of Pryor,
Cashman, Sherman & Flynn since 1969. He is a director of Claire's
Stores, Inc., a fashion accessories retailer whose shares are
listed on the New York Stock Exchange.
Mr. Engman, a director of the Company since October 1986, has
served as President of the Generic Pharmaceutical Industry
Association since September 1993. He was a partner in the
Washington D.C. office of the law firm Winston & Strawn from
February 1988 to September 1993, and was of counsel to that firm
from November 1985 until he became a partner in February 1988. Mr.
Engman served as Chairman of the Federal Trade Commission from 1973
to 1976 and has held numerous governmental appointments, including
Legislative Counsel and General Counsel to the President's Special
Assistant for Consumer Affairs and Assistant Director of the White
House Domestic Council. Mr. Engman is married to the sister of Mr.
Powell's wife.
Mr. Gildenhorn, a director of the Company since November 1994,
is a founder and served as President of The JBG Companies, a
diversified real estate development and management company from
1960 to 1989. He is a founding partner of Brown, Gildenhorn &
Jacobs, a Washington, D.C. law firm, and served as United States
Ambassador to Switzerland from August 1989 to March 1993. Mr.
Gildenhorn is a director of Franklin National Bank and Franklin
Bancorporation, Washington, D.C.
Mr. Gutfreund, a director of the Company since December 1994,
has served as the President and Chief Executive Officer of M&L
International, Inc. (and its predecessors) since 1980, and has been
associated with that company since 1960.
Mr. Partridge is the President and Chief Executive Officer of
SP Industries Limited Partnership ("SP Industries"). He has been
a director of the Company since June 1987 and served as President
and Chief Executive Officer of the Company from June 1987 to April
1991.
Mr. Pinto, a director of the Company since December 1985, has
been Chairman of National Capital Management Corp., an insurance
and real estate company since 1989. Since 1990, Mr. Pinto has been
the President of the Private Finance Group, an investment company.
Mr. Pinto also serves as a director of Andersen Group, Inc., a
dental products company.
Meetings and Committees of the Board of Directors
The Board of Directors held three meetings during 1994.
Except for Mr. Berritt, who was unable to attend one meeting of the
Board of Directors in 1994, each director attended at least 75
percent of the aggregate of (i) the number of such meetings, and
(ii) the number of meetings of committees of the Board of Directors
held during 1994.
The Board of Directors has established three standing
committees: (1) the Executive Committee, (2) the Audit Committee,
and (3) the Compensation Committee.
Messrs. Powell, George and Pollack are members of the
Executive Committee, which took certain actions by unanimous
written consent during 1994. The Executive Committee has and may
exercise all the powers and authority of the Board of Directors in
the management of the business and affairs of the Company.
Messrs. Engman, Pinto and Partridge are members of the Audit
Committee, which held one meeting during 1994. The duties and
responsibilities of the Audit Committee include (a) recommending to
the full Board the appointment of the Company's auditors and any
termination of engagement, (b) reviewing the plan and scope of
audits, (c) reviewing the Company's significant accounting policies
and internal controls, and (d) having general responsibility for
all related auditing matters.
Messrs. Berritt, Engman and Pinto are members of the
Compensation Committee. Mr. Berritt is Chairman of that committee.
The Compensation Committee is responsible for setting and
administering policies that govern annual compensation of the
Company's executive officers. The Compensation Committee has the
exclusive power and authority to make compensation decisions
affecting the Management Agreement between Trivest and the Company
(see "Certain Relationships and Related Transactions - Management
Agreement"), and makes recommendations to the Board of Directors on
compensation matters affecting the Company's executive officers.
The Compensation Committee administers the Company's 1987 Stock
Option Plan, Amended and Restated 1990 Stock Option Plan and the
1994 Stock Option Plan. The 1994 Stock Option Plan is being
submitted to the shareholders for approval at the Annual Meeting.
See "Proposal to Approve the Adoption of the Company's 1994 Stock
Option Plan". The Compensation Committee took certain actions by
unanimous written consent during 1994.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
The following table sets forth certain summary information
concerning compensation paid or accrued by the Company and its
subsidiaries to or on behalf of the Company's Chief Executive
Officer and each of the most highly compensated executive officers
of the Company whose total annual salary and bonus, determined as
of the end of the last fiscal year, exceeded $100,000 (the "Named
Executive Officers"), for the fiscal years ended December 31, 1994,
1993 and 1992:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C>
Annual Compensation
<C> <C> <C> <C>
Other
Name and Principal Annual
Position Year Salary Bonus Compensation
Earl W. Powell 1994 --- --- ---
Chief Executive 1993 --- --- ---
Officer(1) 1992 --- --- ---
John E. Pollack 1994 346,801 189,350 ---
President and 1993 336,700 165,000 ---
Chief Operating 1992 325,000 56,250 ---
Officer(1)(3)
Peter Vandenberg,
Jr. 1994 170,733 94,640 ---
Vice President 1993 165,849 94,640 ---
Treasurer and 1992 160,000 28,256 ---
Chief Financial
Officer
(continued)
<S> <C>
Long Term
Compensation
Awards Payouts
<C> <C> <C>
Name and Principal Options LTIP All Other
Position # Payouts Compensation
Earl W. Powell --- --- ---
Chief Executive 30,000 --- ---
Officer(1) --- --- ---
John E. Pollack --- --- 3,288(2)
President and 50,000 --- 135,591(2)(4)
Chief Operating --- --- ---
Officer(1)(3)
Peter Vandenberg, Jr. --- --- 3,288(2)
Vice President 25,000 --- 2,410(2)
Treasurer and Chief --- --- ---
Financial Officer
</TABLE>
(1) Mr. Powell resigned as Chief Executive Officer in March 1995
in connection with the appointment of Mr. Pollack to that
position.
(2) Includes contributions by the Company to the Andy Johns
Fashions Profit Sharing Plan, a retirement plan that covers
certain employees of the Company and its subsidiaries, of (a)
$3,427 on behalf of Mr. Pollack for 1993 and $3,288 for 1994,
and (b) $2,410 on behalf of Mr. Vandenberg for 1993 and
$3,288 for 1994 .
(3) Mr. Pollack's bonus amount for 1992 consisted of a grant of
50,000 shares of the Company's Common Stock on March 17,
1992. The closing price of the Common Stock on the American
Stock Exchange on such date was $1 1/8.
(4) Prior to being named President and Chief Operating Officer of
the Company in September 1991, Mr. Pollack was employed by
the Company's Biscayne Apparel International, Inc. subsidiary
pursuant to a written employment agreement which has been
terminated (the "Prior Agreement"). Pursuant to an agreement
between Mr. Pollack and the Company, Mr. Pollack agreed to
defer payment of the sum of $96,875, which was otherwise
payable to him on March 15, 1990 pursuant to the terms of the
Prior Agreement. The deferred amount bore interest at the
rate of 10% per annum, and was paid to Mr. Pollack in 1993.
The amount included in the "All Other Compensation" column
for 1993 includes the $96,875 amount deferred, together with
interest thereon from March 15, 1990 in the amount of
$35,289.
Option Grants
No options or stock appreciation rights were granted to the
Named Executive Officers during fiscal 1994.
Stock Option Exercises and Fiscal Year-End Holdings
No Named Executive Officer exercised stock options during the
fiscal year ended December 31, 1994. The following table sets
forth information, with respect to the Named Executive Officers,
concerning unexercised options held by them as of the end of such
fiscal year:
OPTION EXERCISES AND FISCAL YEAR-END VALUE TABLE
<TABLE>
<CAPTION>
<S> <C>
Aggregated Option Exercises in
Last Fiscal Year, and Fiscal Year-End
Option Value
Number of Value of Unexercised
Unexercised In-the-Money
Options at Options at
December 31, 1994 December 31, 1994(1)
Exercis- Unexercis- Exercis- Unexercis-
Name able able able able
Earl W.
Powell . . . . 48,300 35,700 $40,556 $14,569
John E.
Pollack. . . . 36,488 54,075 33,027 23,658
Peter
Vandenberg,
Jr.. . . . . . 23,450 25,550 18,047 8,203
</TABLE>
(1) The closing sale price for the Company's Common Stock as
reported by the American Stock Exchange on December 31, 1994
was $2.3125. Value is calculated by multiplying (a) the
difference between $2.3125 and the option exercise price by
(b) the number of shares of Common Stock underlying the
option.
Employment Contracts and Termination of Employment Arrangements
The Company has no written employment contracts with its
executive officers. Effective January 1, 1993, the Board of
Directors approved an employment arrangement with Mr. Pollack,
pursuant to which he is employed as the Company's President and
Chief Operating Officer. Pursuant to this arrangement, Mr. Pollack
receives an annual base salary which is adjusted annually to
reflect cost of living increases, and is entitled to receive a
performance-based bonus in an amount generally equal to 16 2/3% of
the amount by which the Company's annual operating profit exceeds
an 8% return on annual sales. In the event Mr. Pollack's
employment is terminated by the Company without cause, he is
entitled to receive his base salary for a period of six months
following the date of such termination. Mr. Pollack is bound by
certain restrictive covenants, including an obligation not to
compete with the Company or its subsidiaries, during the period he
is employed by the Company and for a two year period following the
date his employment is terminated for any reason.
Effective January 1, 1993, the Board of Directors approved an
employment arrangement with Mr. Vandenberg, pursuant to which he is
employed as the Company's Vice President, Treasurer and Chief
Financial Officer. Pursuant to this arrangement, Mr. Vandenberg
receives an annual base salary which is adjusted annually to
reflect cost of living increases, and is entitled to receive a
performance-based bonus in an amount generally equal to 8 1/3% of
the amount by which the Company's annual operating profit exceeds
an 8% return on annual sales.
Each of the Named Executive Officers holds options to
purchase Common Stock granted under the Company's 1987 Stock Option
Plan and/or the Company's Amended and Restated 1990 Stock Option
Plan. To the extent not already exercisable, such options
generally become exercisable upon liquidation or dissolution of the
Company, a sale or other disposition of all or substantially all of
the Company's assets, or a merger or consolidation pursuant to
which either (i) the Company does not survive, or (ii) ownership of
more than 49% of the voting power of the Company's voting stock is
transferred. In addition, the Compensation Committee of the Board
of Directors has the discretion to grant "limited stock
appreciation rights" with respect to options granted under the 1987
Stock Option Plan, pursuant to which, in the event of any tender
offer or exchange offer by a third party for more than 20% of the
Company's outstanding Common Stock, the options will automatically
be canceled in return for cash payment to the optionee in an amount
equal to the difference between the highest price paid per share by
the acquirer in such transaction and the exercise price.
Compensation Committee Report on Executive Compensation
Under rules established by the Securities and Exchange
Commission, the Compensation Committee of the Board of Directors of
the Company is required to provide a report explaining the
rationale and considerations that led to fundamental compensation
decisions affecting the Company's executive officers (including the
Named Executive Officers) during the past fiscal year.
The Compensation Committee is responsible for setting and
administering policies that govern annual compensation of the
Company's executive officers, as well as the Company's stock option
plans. The Compensation Committee is comprised of independent
directors, none of whom have interlocking or other relationships
with the Company that would call into question their independence
as Compensation Committee members.
Mr. Powell, the Company's Chairman and its Chief Executive
Officer in 1994, was not compensated by the Company or its
subsidiaries during the past fiscal year. Trivest, Inc., of which
Mr. Powell and Dr. George, the Vice Chairman of the Company's Board
of Directors, are shareholders, directors and executive officers,
provides management services to the Company and its subsidiaries
and receives compensation from the Company pursuant to the terms of
a management agreement. See "Certain Relationships and Related
Transactions--Amended and Restated Management Agreement." Mr.
Klein is an executive officer of Trivest, Inc.
The Compensation Committee's general philosophy with respect
to the compensation of the Company's other executive officers is to
offer competitive compensation programs designed to attract and
retain key executives critical to the long-term success of the
Company and to recognize an individual's contribution and personal
performance. Such compensation programs include a base salary and
annual performance-based bonus as well as stock option plans
designed to provide long-term incentives. In addition, the
Compensation Committee may recommend the grant of discretionary
bonuses to the Company's executive officers.
The base salaries of Messrs. Pollack and Vandenberg have been
fixed at levels which the Compensation Committee believes are
competitive with amounts paid to senior executives with comparable
qualifications, experience and responsibilities. The annual
performance bonus has been structured to reward Mr. Pollack and Mr.
Vandenberg for delivering profitable short-term performance of the
Company's operating units and the Company as a whole.
The Compensation Committee is presently conducting a review of
the Company's compensation policies with respect to its executive
officers and the executive officers of the Company's operating
subsidiaries.
Harold E. Berritt
Lewis A. Engman
James J. Pinto
Performance Graph
Set forth below is a line graph comparing the yearly
percentage change in the cumulative total shareholder return on the
Company's Common Stock against the cumulative total return of the
Standard & Poor's Textile-Apparel Manufacturer Index and the
Russell 2000 Index for the last five fiscal years.
COMPARISION OF FIVE YEAR CUMULATIVE TOTAL
RETURN(1) AMONG BISCAYNE APPAREL, INC.,
THE RUSSELL 2000 INDEX AND THE S&P
TEXTILE-APPAREL MANUFACTURER INDEX
<TABLE>
<CAPTION>
<S> <C>
Cumulative Total Return
12/89 12/90 12/91 12/92 12/93 12/94
Biscayne
Apparel, Inc. 100 108 137 235 352 380
RUSSELL 2000 100 80 117 139 166 163
S&P TEXTILE-
APPAREL MFR 100 87 140 148 112 110
</TABLE>
(1) The calculations of total return assume that $100 was invested
on December 31, 1989 in the Company's Common Stock, the
Russell 2000 Index and the Standard & Poor's Textile-Apparel
Manufacturer Index.
Director Compensation
The Company pays each director other than Messrs. Powell,
George, Pollack, Gutfreund and Vandenberg an annual retainer of
$15,000, payable quarterly, and a $750 fee for each meeting of the
Board attended ($500 in the case of telephonic meetings.) In
addition, members of the Audit Committee and the Compensation
Committee receive a $750 fee for attendance at each committee
meeting ($500 in the case of telephonic meetings.) The Company
reimburses all directors for their expenses in connection with
their activities as directors of the Company.
Each of the foregoing non-employee directors participates or
is eligible to participate in the Company's 1987 Disinterested
Directors Stock Option Plan, the Company's Amended and Restated
1990 Stock Option Plan and the Company's 1994 Stock Option Plan.
The 1994 Stock Option Plan was adopted by the Company's Board of
Directors, subject to shareholder approval, in November 1994. See
"Proposal to Approve the Adoption of the Company's 1994 Stock
Option Plan.".
Compliance with Section 16(a) of the Securities Exchange Act of
1934
Section 16(a) of the Securities Exchange Act of 1934 (the
"Exchange Act") requires the Company's directors and executive
officers, and persons who own more than 10 percent of the Company's
Common Stock, to file with the Securities and Exchange Commission
(the "SEC") initial reports of ownership and reports of changes in
ownership of Common Stock. Officers, directors and greater than 10
percent shareholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the
copies of such reports furnished to the Company and representations
that no other reports were required, all Section 16(a) filing
requirements applicable to its officers, directors and greater than
ten percent beneficial owners were complied with during the fiscal
year ending December 31, 1994.
Certain Relationships and Related Transactions
Acquisition of M&L International, Inc. and Bridge Financing.
On November 30, 1994, the Company acquired M&L International, Inc.,
an Illinois corporation ("M&L"), in a transaction structured as a
forward triangular merger (the "Merger"). M&L's ultimate parent
corporation, New M&L Holding, Inc., a Delaware corporation
("Holding"), was merged with and into the Company's newly-formed
acquisition subsidiary, M&L Acquisition Corp., an Illinois
corporation ("Acquisition Sub"), and, immediately thereafter,
Acquisition Sub was merged with and into M&L's direct parent
corporation, Old M&L International, Inc., an Illinois corporation,
which, in turn, was merged with and into M&L.
Pursuant to the Agreement and Plan of Merger, dated as of
November 1, 1994, among the Company, Acquisition Sub and Holding
(the "Merger Agreement"), at the effective time of the Merger all
of the shares of capital stock of Holding were converted into the
right to receive (a) $1,723,500 in cash, (b) 1,666,997 shares of
the Company's Common Stock, and (c) $776,500 aggregate principal
amount of Bridge Notes (as hereinafter defined) (collectively, the
"Merger Consideration"). In connection with the Merger, the
company retired $2,064,000 of M&L's existing indebtedness and
assumed $1,500,000 aggregate principal amount of M&L's junior
subordinated indebtedness, payable to Kurt C. Gutfreund and Eugene
S. Weiner (the "Junior Subordinated Indebtedness"). Messrs.
Gutfreund and Weiner are the principal executive officers of M&L
and, in connection with the acquisition, Mr. Gutfreund was elected
to serve as a director of Company.
In order to finance the acquisition of M&L, the Company
incurred indebtedness in the aggregate principal amount of
$4,776,500, pursuant to a bridge loan facility (the "Bridge Loan
Facility") made available by the Sellers ($776,500 aggregate
principal amount), Trivest Special Situations Fund 1985, L.P., a
Delaware limited partnership ("TSSF") ($2,000,000 aggregate
principal amount), Trivest Segregated Asset Account, a deferred
annuity investment fund ("TSAA") ($1,200,000 aggregate principal
amount), Earl W. Powell ($300,000 aggregate principal amount) and
James J. Pinto ($500,000 aggregate principal amount). Messrs.
Powell and Pinto are directors of the Company and Mr. Powell also
serves as the Chairman of the Board of the Company. TSSF is the
holder of 1,674,130 shares of the Company's outstanding Common
Stock and $1,400,800 aggregate principal amount of the Company's
13% Subordinated Notes due December 15, 1999. Both TSSF and TSAA
are controlled by Trivest or affiliates of Trivest. The source of
the remainder of the funds used to consummate the acquisition of
M&L and to pay related expenses was working capital of the Company.
The Bridge Loan Facility consisted of the Company's 12% Senior
Subordinated Bridge Notes (the "Bridge Notes"), issued pursuant to
the terms of a Bridge Note Purchase Agreement, dated as of
November 30, 1994 (the "Bridge Note Purchase Agreement"). The
Bridge Notes and the Junior Subordinated Indebtedness were repaid
in March 1995 from the proceeds of a credit facility made available
to the Company and its subsidiaries by a syndicate of commercial
banks.
In connection with the Bridge Loan Facility, the company paid
an origination fee to the Bridge Note holders in the amount of 4%
of the aggregate original principal amount of the Bridge Notes
($191,060).
In connection with the acquisition of M&L, Trivest earned a
transaction fee of $360,000 pursuant to the terms of its management
agreement with the Company, which was paid by the Company in March
1995.
Amended and Restated Management Agreement. Trivest has
rendered consulting, financial and management services to the
Company, including advice and assistance with respect to
acquisitions, since October 1985. Pursuant to its Amended and
Restated Management Agreement, dated as of November 30, 1994 (the
"Restated Management Agreement"), Trivest has agreed to (i)
identify and provide the Company with a right of first refusal to
acquire businesses in the apparel industry, and (ii) provide its
corporate finance, strategic planning and other management
expertise to the Company and its subsidiaries. If an additional
industry is designated by the Company's Board of Directors, Trivest
will provide the Company with a right of first refusal to acquire
businesses in that industry unless Trivest then has a management,
acquisition or other commitment with respect to that industry.
In 1994, prior to its amendment and restatement, the
management agreement provided for annual base compensation of
$257,250 (adjusted annually to reflect cost of living increases.)
The Restated Management Agreement, which expires on January 1,
1998, was entered into in connection with the Company's acquisition
of M&L and provides for annual base compensation of $357,250
(adjusted annually to reflect cost of living increases). Trivest
received aggregate cash compensation from the Company of $265,583
with respect to the Company's 1994 fiscal year.
In the event additional business operations are acquired by
the Company, Trivest's annual base compensation will be increased
by the greater of (i) $100,000, or (ii) five percent of the
projected annual earnings before interest and taxes of any such
acquired business (subject to adjustment, however, in the event the
Company's Board of Directors determines such amount to be
inappropriate). In addition, Trivest is entitled to receive an
acquisition fee of up to three percent of the purchase price for
any acquisition introduced to the Company by it and approved by the
Board of Directors.
Trivest Legal Department. Trivest maintains an internal legal
department, headed by Mr. Klein. The Trivest legal department
accounts for its time on an hourly basis and bills Trivest and its
affiliates, including the Company, for services rendered at
prevailing rates. In 1994, the Company paid Trivest $160,900 for
services rendered by the Trivest legal department. Such services
included advice and assistance rendered in connection with the July
1994 refinancing of the Company's bank indebtedness and in
connection with the acquisition of M&L and related financing
transactions. The Company believes that the fees charged by the
Trivest legal department in 1994 were no less favorable to the
Company than fees charged by unaffiliated third parties for similar
services.
Cost Sharing Arrangement. In June 1993, the Company entered
into a cost sharing arrangement with SP Industries. Pursuant to
this arrangement, certain employees of the Company provide SP
Industries with consulting and financial services in exchange for
an annual cash fee. The amount of the annual fee for 1994 was
$130,000. An aggregate of $130,000 was paid by SP Industries to
the Company for services rendered in 1994. This cost sharing
arrangement was terminated in March 1995.
Insurance Services. Since 1986, DGP Insurance Agency, Inc.
("DGP"), a risk manager and insurance broker, has provided risk
management and insurance services to affiliates of Trivest,
including the Company. Messrs. George and Powell collectively own
100 percent of DGP, which is managed by an established unrelated
insurance broker. DGP provides services exclusively to affiliates
of Messrs. George and Powell, including the Company. For such
services, DGP receives 50 percent of the commissions received by
the unrelated insurance broker in connection with policies written.
DGP received approximately $15,142 in commissions from the
Company's 1994 insurance premiums.
Subordinated Notes. Trivest Special Situations Fund 1985,
L.P., a Delaware limited partnership, is the holder of record of
$1,400,800 principal amount of the 13% Subordinated Notes due
December 1999 issued by the Company in December 1989 (the "Notes").
Certain directors of the Company and their affiliates are limited
partners of TSSF and/or its general partner, Trivest Associates,
L.P. See "Security Ownership," Note 3. In 1994, the Company made
interest payments totalling $182,104 to TSSF as a result of its
ownership of its Notes.
Interest in Vendor. Mr. Pollack owns 16 2/3% of the capital
stock of Phar-Shar Manufacturing Company, Inc., a Kentucky
corporation ("Phar-Shar"), which provides warehousing and shipping
services to the Company's Biscayne Apparel International, Inc. and
Mackintosh of New England Co. subsidiaries. In 1994, the Company
paid approximately $938,002 in warehousing and shipping expenses to
Phar-Shar. The Company has a right of first refusal to acquire Mr.
Pollack's shares of Phar-Shar common stock for so long as he
remains an employee of the Company or its subsidiaries.
PROPOSAL TO APPROVE THE ADOPTION OF THE
COMPANY'S 1994 STOCK OPTION PLAN
General
On November 17, 1994, the Company's Board of Directors
adopted, subject to approval by the shareholders of the Company,
the Company's 1994 Stock Option Plan (the "1994 Stock Option
Plan"). The material features of the 1994 Stock Option Plan are
discussed below and are qualified in their entirety by reference to
the 1994 Stock Option Plan, which is attached as Exhibit A to this
Proxy Statement.
The purpose of the 1994 Stock Option Plan is to provide
additional incentive to attract and retain qualified competent
directors and persons who provide management services and upon
whose efforts and judgment the success of the Company (including
its subsidiaries) is largely dependent, through the encouragement
of stock ownership in the Company by such persons. In furtherance
of this purpose, the 1994 Stock Option Plan authorizes (a) the
granting of incentive stock options and non-statutory stock options
to purchase Common Stock to persons satisfying the description
above (approximately 75 persons) (b) the provisions of loans for
the purpose of financing the exercise of options and the amount of
taxes payable in connection therewith, and (c) the use of already
owned Common Stock as payment of the exercise price for options
granted under the 1994 Stock Option Plan.
Approval of the 1994 Stock Option Plan by the company's
shareholders is one of the conditions of Rule 16b-3, a rule
promulgated by the Securities and Exchange Commission (the "SEC")
that provides an exemption from the operation of the "short-swing
profit" recovery provisions of Section 16(b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), with respect
to the acquisition of options and certain other transactions by
officers and directors under the 1994 Stock Option Plan.
Shareholder approval of the 1994 Stock Option Plan is also required
(i) in order for the 1994 Stock Option Plan to be eligible under
the "plan lender" exemption from the margin requirements of
Regulation G promulgated under the Exchange Act, and (ii) in order
for any option that may be granted by the Board of Directors as an
incentive stock option to qualify as an incentive stock option
under the Code, and (iii) for purposes of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"). Section
162(m) can limit the deductibility of compensation expenses over $1
million with respect to the compensation of certain top executives
in certain circumstances.
The 1994 Stock Option Plan will be administered by a committee
consisting of three or more directors designated by the Board of
Directors, or, if a Committee is not designated, by the Board of
Directors (the "Committee"). The Committee in its sole discretion
determines the persons to be awarded options, the number of shares
subject thereto and the exercise price and other terms thereof. In
addition, the Committee has full power and authority to construe
and interpret the 1994 Stock Option Plan, and the acts of the
Committee are final, conclusive and binding upon all interested
parties, including the Company, its shareholders, its officers and
employees, recipients of grants under the 1994 Stock Option Plan
and all persons or entities claiming by or through such persons.
The Board of Directors has designated the Compensation Committee as
the Committee that will administer the 1994 Stock Option Plan.
An aggregate of 150,000 shares of Common Stock (subject to
adjustment as discussed below) will be reserved for sale upon
exercise of options granted or to be granted under the 1994 Stock
Option Plan. The shares acquired upon exercise of options granted
under the 1994 Stock Option Plan will be from the Company's
authorized and unissued shares of Common Stock. The holders of
Common Stock do not have any preemptive rights to purchase or
subscribe for the shares reserved for issuance under the 1994 Stock
Option Plan. If any option granted under the 1994 Stock Option
Plan should expire or terminate for any reason other than having
been exercised in full, the unpurchased shares subject to that
option will again be available for grant under the 1994 Stock
Option Plan.
As of November 30, 1994, the Compensation Committee granted,
subject to shareholder approval of the 1994 Stock Option Plan
described in this proposal, options to purchase 85,000 shares of
Common Stock (the "New Options") to 18 employees of the Company's
M&L International, Inc. subsidiary (none of whom are directors or
officers of the Company). The exercise price for each New Option is
$2.50 per share. The closing market price for the Company's Common
Stock on November 29, 1994 was $2.50. The New Options will become
exercisable at the rate of 20% per year on November 30 of each
year, beginning on November 30, 1995. The value of each New Option
as of the Record Date, based upon the difference between the
exercise price and the market price on such date, is zero. Each New
Option has a term of 10 years following the date of grant. No other
options have been granted under the 1994 Stock Option Plan through
the date of this proxy statement.
Management of the Company believes that options will be
granted primarily to those persons who possess a capacity to
contribute significantly to the successful performance of the
Company. Because persons to whom grants of options are to be made
are to be determined from time to time by the Board of Directors,
or the Committee, in its discretion, it is impossible at this time
to indicate the precise number, name or positions of persons who
will receive options or the number of shares for which options will
be granted to any such employee or director under the 1994 Stock
Option Plan.
Terms and Conditions
All options granted under the 1994 Stock Option Plan must be
evidenced by a written agreement between the Company and the
grantee. Such agreement shall contain such terms and conditions,
consistent with the 1994 Stock Option Plan, relating to the grant,
the time or times of exercise and other terms of the options as the
Committee shall prescribe.
Under the 1994 Stock Option Plan, the option price per share
of any incentive stock option may not be less than 100 percent of
the "fair market value" of the underlying shares on the date of
grant. For purposes of the 1994 Stock Option Plan, the term "fair
market value" shall be the closing price of the Company's Common
Stock on the business day immediately preceding such date, unless
the Committee in its sole discretion shall determine otherwise in
a fair and uniform manner. For this purpose, the term closing
price on any business day shall be the last reported sale price of
the Common Stock on the American Stock Exchange as reported in any
newspaper of general circulation. The minimum aggregate fair
market value (determined at the date of grant) of the shares with
respect to which an optionee may be granted one or more incentive
stock options in any calendar year (under all stock options plans
of the Company) shall not exceed $100,000 plus any unused limit
carryover (as defined in the Code in such year). The exercise
price of an option may be paid in cash, by certified or official
bank check, by money order, by an optionee's promissory note, by
delivery of already owned shares of Common Stock having a fair
market value equal to the exercise price, or by a combination of
the foregoing. Cash payments will be used by the Company for
general corporate purposes. Payments made in Common Stock must be
made by delivery of stock certificates in negotiable form.
No incentive stock option shall be granted to a director who
is not also an employee of the Company or a subsidiary of the
Company. Additionally, an incentive stock option shall not be
granted to any person owning directly (or indirectly as defined in
Section 425(d) of the Code) at the date of grant, stock possessing
more than 10% of the total combined voting power of all classes of
stock of the Company (or of its parent or subsidiary) unless the
option price of such option is at least 110% of the fair market
value of the shares subject to such option on the date the option
is granted, and the period during which the option may be exercised
does not exceed five (5) years from the date of grant.
The use of already owned shares of Common Stock applies to
payment for the exercise of an option in a single transaction and
to the "pyramiding" of already owned shares in successive,
simultaneous option exercises. In general, pyramiding permits an
option holder to start with as little as one share of Common Stock
and exercise an entire option to the extent then exercisable (no
matter what the number of shares subject thereto). By utilizing
already owned shares of Common Stock, no cash (except for
fractional share adjustments) is needed to exercise an option.
Consequently, the optionee would receive Common Stock equal in
value to the spread between the fair market value of the shares
subject to the option and the exercise price of the option.
No option granted under the 1994 Stock Option Plan is
assignable or transferable, other than by will or by the laws of
descent and distribution. During the lifetime of an optionee, an
option is exercisable only by him. The expiration date of an
option will be determined by the Committee at the time of the
grant, but in no event will an option be exercisable after the
expiration of 10 years from the date of grant. An option may be
exercised at any time or from time to time or only after a period
of time or in installments, as the Committee determines.
The unexercised portion of any option granted under the 1994
Stock Option Plan shall automatically be terminated (a) three
months after the date on which the optionee's employment is
terminated for any reason other than (i) Cause (as defined in the
1994 Stock Option Plan), (ii) mental or physical disability, or
(iii) death; (b) immediately upon the termination of the optionee's
employment for Cause; (c) 12 months after the date on which the
optionee's employment is terminated by reason of mental or physical
disability; or (d)(i) 12 months after the date on which the
optionee's employment is terminated by reason of the death of the
employee, or (ii) three months after the date on which the optionee
shall die if such death shall occur during the one year period
following the termination of the optionee's employment by reason of
mental or physical disability.
An option may not be granted to a director unless (i) the
grant of such option is authorized by, and all of the terms of such
option are determined by, a committee whose members are
Disinterested Persons (as that term is defined in the 1994 Stock
Option Plan), or (ii) such option is granted in conformity with all
of the following requirements: (a) the maximum number of shares for
which any one director may be granted an option in any calendar
year shall not exceed then percent (10%) of the total number of
shares for which options may be granted under the 1994 Stock Option
Plan; (b) the option may be exercised only after the expiration of
at least six calendar months from the date such option is granted;
and (c) regardless whether such option is an incentive stock option
or a non-statutory stock option, the exercise price per share of
such option shall not be less than the fair market value per share
on the date such option is granted. The Board has designated its
Compensation Committee, which currently consists of three
Disinterested Persons, to administer the 1994 Stock Option Plan.
To prevent dilution of the rights of a holder of an option,
1994 Stock Option Plan provides for adjustment of the number of
shares for which options may be granted, the number of shares
subject to outstanding options and the exercise price of
outstanding options in the event of any subdivision or
consolidation of shares, any stock dividend, recapitalization or
other capital adjustment of the Company. Provisions governing the
effect upon options of a merger, consolidation or other
reorganization of the Company are also included in the 1994 Stock
Option Plan.
Federal Income Tax Consequences
The 1994 Stock Option Plan is neither qualified under the
provisions of Section 401(a) or the Code, nor subject to any of the
provisions of the Employee Retirement Income Security Act of 1974.
Incentive Stock Options. The 1994 Stock Option Plan provides
for the grant of stock options that qualify as "incentive stock
options" as defined in Section 422 of the Code. Under the Code, an
optionee generally is not subject to ordinary income tax upon the
grant or exercise of an incentive stock option. However, an
employee who exercises an incentive stock option by delivering
shares of Common Stock previously acquired pursuant to the exercise
of an incentive stock option is treated as making a Disqualifying
Disposition (defined below) of such shares if the employee delivers
such shares before the expiration of the holding period applicable
to such shares. The applicable holding period is the longer of two
years from the date of grant or one year from the date of exercise.
The effect of this provision is to prevent "pyramiding" the
exercise of an incentive stock option (i.e., the exercise of the
incentive stock option for one share and the use of that share to
make successive exercise of the incentive stock option until it is
completely exercised) without the imposition of current income tax.
If, subsequent to the exercise of an incentive stock option
(whether paid for in cash or in shares), the optionee holds the
shares received upon exercise for a period that exceeds (a) two
years from the date such incentive stock option was granted or, if
later, (b) one year from the date of exercise (the "Required
Holding Period"), the difference (if any) between the amount
realized from the sale of such shares and their tax basis to the
holder will be taxed as long-term capital gain or loss.
In general, if, after exercising an incentive stock option, an
employee disposes of the shares so acquired before the end of the
Required Holding Period (a "Disqualifying Disposition"), such
optionee would be deemed in receipt of ordinary income in the year
of the Disqualifying Disposition, in an amount equal to the excess
of the fair market value of the shares at the date the incentive
stock option was exercised over the exercise price. If the
Disqualifying Disposition is a sale or exchange which would permit
a loss to be recognized under the Code (were a loss in fact to be
sustained), and the sales proceeds are less than the fair market
value of the shares on the date of exercise, the optionee's
ordinary income would be limited to the gain (if any) from the
sale. If the amount realized upon disposition exceeds the fair
market value of the shares on the date of exercise, the excess
would be treated as short-term or long-term capital gain, depending
on whether the holding period for such shares exceeded one year.
The amount by which the fair market value of the shares of
Common Stock acquired at the time of exercise of an incentive stock
option exceeds the purchase price of the shares under such option
generally will be treated as an item of adjustment included in the
optionee's alternative minimum taxable income for purposes of the
alternative minimum tax for the year in which the option is
exercised. If, however, there is a Disqualifying Disposition of
the shares in the year in which the option is exercised, there will
be no item of adjustment for purposes of the alternative minimum
tax as a result of the exercise of the option with respect to those
shares. If there is a Disqualifying Disposition in a year after
the year of exercise, the income on the Disqualifying Disposition
will not be considered income for purposes of the alternative
minimum tax in that subsequent year. The optionee's tax basis for
shares acquired pursuant to the exercise of an incentive stock
option will be increased for purposes of determining his
alternative minimum tax by the amount of the item of adjustment
recognized with respect to such shares in the year the option was
exercised.
An income tax deduction is not allowed to the Company with
respect to the grant or exercise of an incentive stock option or
the disposition, after the Required Holding Period, of shares
acquired upon exercise. In the event of a Disqualifying
Disposition, a Federal income tax deduction will be allowed to the
Company in an amount equal to the ordinary income to be recognized
by the optionee, provided that such amount constitutes an ordinary
and necessary business expense to the Company and is reasonable,
and either the employee includes that amount in his income or the
Company timely satisfies its reporting requirements with respect to
such income.
Non-Statutory Options. An optionee granted a non-statutory
option under the 1994 Stock Option Plan will generally recognize,
at the date of exercise of such option, ordinary income equal to
the difference between the exercise price and the fair market value
of the shares of Common Stock subject to the option. This taxable
ordinary income will be subject to Federal income tax withholding.
A Federal income tax deduction will be allowed to the Company in an
amount equal to the ordinary income to be recognized by the
optionee, provided that such amount constitutes an ordinary and
necessary business expense to the Company and is reasonable, and
either the employee includes that amount in his income or the
Company timely satisfies its reporting obligations with respect to
such income.
If an optionee exercises a non-statutory option by delivering
other shares, the optionee will not recognize gain or loss with
respect to the exchange of such shares, even if their then fair
market value is different from the optionee's tax basis. The
optionee, however, will be taxed as described above with respect to
the exercise of the non-statutory option as if he had paid the
exercise price in cash, and the Company likewise generally will be
entitled to an equivalent tax deduction. Provided a separate
identifiable stock certificate is issued therefor, the optionee's
tax basis in that number of shares received on such exercise which
is equal to the number of shares surrendered on such exercise will
be equal to his tax basis in the shares surrendered and his holding
period for such number of shares received will include his holding
period for the shares surrendered. The optionee's tax basis and
holding period for the additional shares received on exercise of a
non-statutory option paid for, in whole or in part, with shares
will be the same as if the optionee had exercised the non-statutory
option solely for cash.
Amendments
The 1994 Stock Option Plan will expire on November 17, 2004,
or at such earlier date as the Board of Directors or a duly
authorized committee thereof may determine, and any option
outstanding on such date will remain outstanding until it has
either expired or has been exercised. The Board of Directors or a
duly authorized committee thereof may amend, suspend or terminate
the 1994 Stock Option Plan at any time, provided that such
amendment may not adversely affect the rights of an optionee under
an outstanding option without the affected optionee's written
consent.
The Committee may modify the 1994 Stock Option Plan, except
that it may not amend the 1994 Stock Option Plan, without first
obtaining shareholder approval, to (a) materially increase the
benefits accruing to participants under the 1994 Stock Option Plan,
(b) increase the number of shares of Common Stock reserved for
issuance, or (c) materially modify the requirements as to
eligibility for participation under the 1994 Stock Option Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
COMPANY'S SHAREHOLDERS VOTE FOR APPROVAL OF THE ADOPTION OF THE
COMPANY'S 1994 STOCK OPTION PLAN.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company's independent public accountants for year ended
December 31, 1994 were and for 1995 will be the firm of Coopers &
Lybrand L.L.P. It is not expected that representatives of such
firm will attend the Annual Meeting.
OTHER BUSINESS
The Board knows of no other business to be brought before the
Annual Meeting. If, however, any other business should properly
come before the Annual Meeting, the persons named in the
accompanying proxy will vote proxies as in their discretion they
may deem appropriate, unless they are directed by a proxy to do
otherwise.
INFORMATION CONCERNING SHAREHOLDER PROPOSALS
Pursuant to Rule 14a-8 promulgated by the Securities and
Exchange Commission, a shareholder intending to present a proposal
to be presented at the 1996 Annual Meeting of Shareholders must
deliver a proposal in writing to the Company's principal executive
offices on or before December 26, 1995.
By Order Of The Board Of Directors
Peter W. Klein
Secretary
Clifton, New Jersey
April 24, 1995
Exhibit A
BISCAYNE APPAREL, INC.
1994 STOCK OPTION PLAN
1. PURPOSE. The purpose of this Plan is to advance the
interests of Biscayne Apparel, Inc., a Florida corporation (the
"Company"), and its Subsidiaries by providing an additional in-
centive to attract and retain qualified and competent persons who
provide management services and upon whose efforts and judgment the
success of the Company and its Subsidiaries is largely dependent,
through the encouragement of stock ownership in the Company by such
persons.
2. DEFINITIONS. As used herein, the following terms shall
have the meaning indicated:
(a) "Board" shall mean the Board of Directors of the
Company.
(b) "Committee" shall mean the committee appointed by
the Board pursuant to Section 13(a) hereof, or, if such committee
is not appointed, the Board.
(c) "Common Stock" shall mean the Company's Common
Stock, par value $.01 per share.
(d) "Director" shall mean a member of the Board.
(e) "Disinterested Person" shall mean one who, at the
time he acts on the granting of any Option is not eligible, and
within one year prior thereto has not been eligible, to receive
Shares, options for Shares or any rights with respect to Shares
under this Plan or any other plan of the Company or any of its
affiliates.
(f) "Fair Market Value" of a Share on any date of
reference shall mean the "Closing Price" (as defined below) of the
Common Stock on the business day immediately preceding such date,
unless the Committee in its sole discretion shall determine
otherwise in a fair and uniform manner. For the purpose of
determining Fair Market Value, the "Closing Price" of the Common
Stock on any business day shall be (i) if the Common Stock is
listed or admitted for trading on any United States national
securities exchange, or if actual transactions are otherwise
reported on a consolidated transaction reporting system, the last
reported sale price of Common Stock on such exchange or reporting
system, as reported in any newspaper of general circulation, (ii)
if the Common Stock is quoted on the National Association of
Securities Dealers Automated Quotations System ("NASDAQ"), or any
similar system of automated dissemination of quotations of
securities prices in common use, the last reported sale price of
Common Stock on such system or, if sales prices are not reported,
the mean between the closing high bid and low asked quotations for
such day of Common Stock on such system, as reported in any
newspaper of general circulation or (iii) if neither clause (i) or
(ii) is applicable, the mean between the high bid and low asked
quotations for the Common Stock as reported by the National Quota-
tion Bureau, Incorporated if at least two securities dealers have
inserted both bid and asked quotations for Common Stock on at least
five of the ten preceding days.
(g) "Incentive Stock Option" shall mean an incentive
stock option as defined in Section 422 of the Internal Revenue
Code.
(h) "Internal Revenue Code" shall mean the Internal
Revenue Code of 1986, as amended from time to time.
(i) "Non-Qualified Stock Option" shall mean an Option
which is not an Incentive Stock Option.
(j) "Officer" shall mean the Company's Chairman of the
Board, President, Chief Executive Officer, principal financial
officer, principal accounting officer, any vice-president of the
Company in charge of a principal business unit, division or
function (such as sales, administration or finance), any other
officer who performs a policy-making function, or any other person
who performs similar policy-making functions for the Company.
Officers of Subsidiaries shall be deemed Officers of the Company if
they perform such policy-making functions for the Company. As used
in this paragraph, the phrase "policy-making function" does not
include policy-making functions that are not significant. If
pursuant to Item 401(b) of Regulation S-K (17 C.F.R. Section
229.401(b)) the Company identifies a person as an "executive
officer," the person so identified shall be deemed an "Officer"
even though such person may not otherwise be an "Officer" pursuant
to the foregoing provisions of this paragraph.
(k) "Option" (when capitalized) shall mean any option
granted under this Plan.
(l) "Optionee" shall mean a person to whom a stock
option is granted under this Plan or any person who succeeds to the
rights of such person under this Plan by reason of the death of
such person.
(m) "Plan" shall mean this Stock Option Plan for the
Company.
(n) "Securities Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended.
(o) "Share" shall mean a share of Common Stock.
(p) "Subsidiary" shall mean any corporation (other
than the Company) in any unbroken chain of corporations beginning
with the Company if, at the time of the granting of the Option,
each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50 percent or more of the
total combined voting power of all classes of stock in one of the
other corporations in such chain.
3. SHARES AVAILABLE FOR OPTION GRANTS. The Committee may
grant to Optionees from time to time Options to purchase an
aggregate of up to One Hundred Fifty Thousand (150,000) Shares from
the Company's authorized and unissued Shares. If any Option
granted under the Plan shall terminate, expire, or be cancelled or
surrendered as to any Shares, new Options may thereafter be granted
covering such Shares.
4. INCENTIVE AND NON-QUALIFIED OPTIONS.
(a) An Option granted hereunder shall be either an
Incentive Stock Option or a Non-Qualified Stock Option as deter-
mined by the Committee at the time of grant of such Option and
shall clearly state whether it is an Incentive Stock Option or Non-
Qualified Stock Option. All Incentive Stock Options shall be
granted within 10 years from the effective date of this Plan.
(b) Options otherwise qualifying as Incentive Stock
Options hereunder will not be treated as Incentive Stock Options to
the extent that the aggregate fair market value (determined at the
time the Option is granted) of the Shares, with respect to which
Options meeting the requirements of Internal Revenue Code Section
422(b) are exercisable for the first time by any individual during
any calendar year (under all plans of the Company and its parent
and subsidiary corporations), exceeds $100,000.
5. CONDITIONS FOR GRANT OF OPTIONS.
(a) Each Option shall be evidenced by an option
agreement that may contain any term deemed necessary or desirable
by the Committee, provided such terms are not inconsistent with
this Plan or any applicable law. Optionees shall be those persons
selected by the Committee from the class of all regular employees
of the Company or its Subsidiaries and all Directors of the
Company, whether or not employees; provided, however, that no
Incentive Stock Option shall be granted to a Director who is not
also an employee of the Company or a Subsidiary. Any person who
files with the Committee, in a form satisfactory to the Committee,
a written waiver of eligibility to receive any Option under this
Plan shall not be eligible to receive any Option under this Plan
for the duration of such waiver.
(b) In granting Options, the Committee shall take into
consideration the contribution the person has made to the success
of the Company or its Subsidiaries and such other factors as the
Committee shall determine. The Committee shall also have the
authority to consult with and receive recommendations from officers
and other personnel of the Company and its Subsidiaries with regard
to these matters. The Committee may from time to time in granting
Options under the Plan prescribe such other terms and conditions
concerning such Options as it deems appropriate, including, without
limitation, (i) prescribing the date or dates on which the Option
becomes exercisable, (ii) providing that the Option rights accrue
or become exercisable in installments over a period of years, or
upon the attainment of stated goals or both, or (iii) relating an
Option to the continued employment of the Optionee for a specified
period of time, provided that such terms and conditions are not
more favorable to an Optionee than those expressly permitted
herein.
(c) The Options granted to employees under this Plan
shall be in addition to regular salaries, pension, life insurance
or other benefits related to their employment with the Company or
its Subsidiaries. Neither the Plan nor any Option granted under
the Plan shall confer upon any person any right to employment or
continuance of employment by the Company or its Subsidiaries.
(d) Notwithstanding any other provision of this Plan,
an Incentive Stock Option shall not be granted to any person owning
directly or indirectly (through attribution under Section 424(d) of
the Internal Revenue Code) at the date of grant, stock possessing
more than 10% of the total combined voting power of all classes of
stock of the Company (or of its parent or subsidiary [as defined in
Section 424 of the Internal Revenue Code] at the date of grant)
unless the option price of such Option is at least 110% of the Fair
Market Value of the Shares subject to such Option on the date the
Option is granted, and such Option by its terms is not exercisable
after the expiration of five years from the date such Option is
granted.
(e) Notwithstanding any other provision of this Plan,
and in addition to any other requirements of this Plan, the
aggregate number of Options granted to any one Director, Officer or
employee may not exceed 30% of the total number of options
available for grant under the Plan.
(f) Notwithstanding any other provision of the Plan,
and in addition to any other requirements of the Plan, Options may
not be granted to a Director unless (i) the grant of such Options
is authorized by, and all of the terms of such Options are deter-
mined by, a Committee that is appointed in accordance with Section
13 of this Plan and all of whose members are Disinterested Persons,
or (ii) such Options are granted in conformity with all of the
following requirements:
(A) The maximum number of Shares for which any one
Director may be granted an Option in any calendar year shall not
exceed ten percent (10%) of the total number of Shares for which
Options may be granted under the Plan.
(B) Regardless whether such Option is an Incentive
Stock Option or a Non-Qualified Stock Option, the exercise price
per Share of such Option shall not be less than the Fair Market
Value per Share on the date such Option is granted.
6. OPTION PRICE. Except as otherwise required by
paragraph (f)(ii) of Section 5, the option price per Share of any
Option shall be any price determined by the Committee but shall not
be less than the par value per Share; provided, however, that in no
event shall the option price per Share of any Incentive Stock
Option be less than the Fair Market Value of the Shares underlying
such Option on the date such Option is granted.
7. EXERCISE OF OPTIONS. An Option shall be deemed exer-
cised when (i) the Company has received written notice of such
exercise in accordance with the terms of the Option, (ii) full
payment of the aggregate option price of the Shares as to which the
Option is exercised has been made, and (iii) arrangements that are
satisfactory to the Committee in its sole discretion have been made
for the Optionee's payment to the Company of the amount that is
necessary for the Company or Subsidiary employing the Optionee to
withhold in accordance with applicable Federal or state tax
withholding requirements. Unless further limited by the Committee
in any Option, the option price of any Shares purchased shall be
paid in cash, by certified or official bank check, by money order,
with Shares or by a combination of the above; provided further,
however, that the Committee in its sole discretion may accept a
personal check in full or partial payment of any Shares. If the
exercise price is paid in whole or in part with Shares, the value
of the Shares surrendered shall be their Fair Market Value on the
date the Option is exercised. The Company in its sole discretion
may, on an individual basis or pursuant to a general program
established in connection with this Plan, lend money to an
Optionee, guarantee a loan to an Optionee, or otherwise assist an
Optionee to obtain the cash necessary to exercise all or a portion
of an Option granted hereunder or to pay any tax liability of the
Optionee attributable to such exercise. If the exercise price is
paid in whole or part with Optionee's promissory note, such note
shall (i) provide for full recourse to the maker, (ii) be colla-
teralized by the pledge of the Shares that the Optionee purchases
upon exercise of such Option, (iii) bear interest at the prime rate
of the Company's principal lender, and (iv) contain such other
terms as the Board in its sole discretion shall reasonably require.
No Optionee shall be deemed to be a holder of any Shares subject to
an Option unless and until a stock certificate or certificates for
such Shares are issued to such person(s) under the terms of this
Plan. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to
the date such stock certificate is issued, except as expressly
provided in Section 10 hereof.
8. EXERCISABILITY OF OPTIONS. Any Option shall become
exercisable in such amounts, at such intervals and upon such terms
as the Committee shall provide in such Option (subject, however, to
the requirements of paragraph (f)(ii) of Section 5, if applicable),
except as otherwise provided in this Section 8.
(a) The expiration date of an Option shall be deter-
mined by the Committee at the time of grant, but in no event shall
an Option be exercisable after the expiration of 10 years from the
date of grant of the Option.
(b) Unless otherwise provided in any Option, each
outstanding Option shall become immediately fully exercisable:
(i) if there occurs any transaction (which shall
include a series of transactions occurring within 60 days or
occurring pursuant to a plan), that has the result that
shareholders of the Company immediately before such transaction
cease to own at least 51 percent of the voting stock of the Company
or of any entity that results from the participation of the Company
in a reorganization, consolidation, merger, liquidation or any
other form of corporate transaction;
(ii) if the shareholders of the Company shall approve
a plan of merger, consolidation, reorganization, liquidation or
dissolution in which the Company does not survive (unless the
approved merger, consolidation, reorganization, liquidation or dis-
solution is subsequently abandoned); or
(iii) if the shareholders of the Company shall approve
a plan for the sale, lease, exchange or other disposition of all or
substantially all the property and assets of the Company (unless
such plan is subsequently abandoned).
(c) The Committee may in its sole discretion accel-
erate the date on which any Option may be exercised and may
accelerate the vesting of any Shares subject to any Option or
previously acquired by the exercise of any Option.
9. TERMINATION OF OPTION PERIOD.
(a) For purposes of this Section 9, the date upon
which a non-employee Director's "employment" terminates shall be
deemed to be the date upon which such person ceases to be a
Director. The unexercised portion of any Option shall automatical-
ly and without notice terminate and become null and void at the
time of the earliest to occur of the following:
(i) three months after the date on which the
Optionee's employment is terminated or, in the case of a Non-
Qualified Stock Option, and unless the Committee shall otherwise
determine in writing in its sole discretion, the date on which the
Optionee's employment is terminated, in either case for any reason
other than by reason of (A) Cause, which, solely for purposes of
this Plan, shall mean the termination of the Optionee's employment
by reason of the Optionee's wilful misconduct or gross negligence,
(B) a mental or physical disability as determined by a medical
doctor satisfactory to the Committee, or (C) death;
(ii) immediately upon the termination of the
Optionee's employment for Cause;
(iii) twelve months after the date on which the
Optionee's employment is terminated by reason of a mental or
physical disability (within the meaning of Internal Revenue Code
Section 22(e)) as determined by a medical doctor satisfactory to
the Committee;
(iv) (A) twelve months after the date of termination
of the Optionee's employment by reason of death of the employee, or
(B) three months after the date on which the Optionee shall die if
such death shall occur during the one year period specified in Sub-
section 9(a)(iii) hereof.
(b) The Committee in its sole discretion may by giving
written notice ("cancellation notice") cancel, effective upon the
date of the consummation of any corporate transaction described in
Subsections 8(b)(ii) or (iii) hereof, any Option that remains
unexercised on such date. Such cancellation notice shall be given
a reasonable period of time prior to the proposed date of such
cancellation and may be given either before or after approval of
such corporate transaction.
10. ADJUSTMENT OF SHARES.
(a) If at any time while the Plan is in effect or
unexercised Options are outstanding, there shall be any increase or
decrease in the number of issued and outstanding Shares through the
declaration of a stock dividend or through any recapitalization
resulting in a stock split-up, combination or exchange of Shares,
then and in such event:
(i) appropriate adjustment shall be made in the
maximum number of Shares available for grant under the Plan, so
that the same percentage of the Company's issued and outstanding
Shares shall continue to be subject to being so optioned; and
(ii) appropriate adjustment shall be made in the
number of Shares and the exercise price per Share thereof then
subject to any outstanding Option, so that the same percentage of
the Company's issued and outstanding Shares shall remain subject to
purchase at the same aggregate exercise price.
(b) Unless otherwise provided in any Option, the
Committee may change the terms of Options outstanding under this
Plan, with respect to the option price or the number of Shares
subject to the Options, or both, when, in the Committee's sole
discretion, such adjustments become appropriate by reason of a
corporate transaction described in Subsections 8(b)(ii) or (iii)
hereof so as to preserve but not increase benefits under the Plan.
(c) Except as otherwise expressly provided herein, the
issuance by the Company of shares of its capital stock of any
class, or securities convertible into shares of capital stock of
any class, either in connection with direct sale or upon the
exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into
such shares or other securities, shall not affect, and no adjust-
ment by reason thereof shall be made to, the number of or exercise
price for Shares then subject to outstanding Options granted under
the Plan.
(d) Without limiting the generality of the foregoing,
the existence of outstanding Options granted under the Plan shall
not affect in any manner the right or power of the Company to make,
authorize or consummate (i) any or all adjustments, recapitaliza-
tions, reorganizations or other changes in the Company's capital
structure or its business; (ii) any merger or consolidation of the
Company; (iii) any issue by the Company of debt securities, or
preferred or preference stock that would rank above the Shares
subject to outstanding Options; (iv) the dissolution or liquidation
of the Company; (v) any sale, transfer or assignment of all or any
part of the assets or business of the Company; or (vi) any other
corporate act or proceeding, whether of a similar character or
otherwise.
11. TRANSFERABILITY OF OPTIONS AND SHARES.
(a) Unless the Committee's prior written consent is
obtained and the transaction does not violate the requirements of
Rule 16b-3 promulgated under the Securities Exchange Act, no Option
shall be subject to alienation, assignment, pledge, charge or other
transfer other than by the Optionee by will or the laws of descent
and distribution, and any attempt to make any such prohibited
transfer shall be void. Each Option shall be exercisable during
the Optionee's lifetime only by the Optionee.
(b) Unless the Committee's prior written consent is
obtained and the transaction does not violate the requirements of
Rule 16b-3 promulgated under the Securities Exchange Act, no Shares
acquired by an Officer or Director pursuant to the exercise of an
Option may be sold, assigned, pledged or otherwise transferred
prior to the expiration of the six-month period following the date
on which the Option was granted.
12. ISSUANCE OF SHARES.
(a) Notwithstanding any other provision of this Plan,
the Company shall not be obligated to issue any Shares unless it is
advised by counsel of its selection that it may do so without
violation of the applicable Federal and State laws pertaining to
the issuance of securities, and may require any stock so issued to
bear a legend, may give its transfer agent instructions, and may
take such other steps, as in its judgment are reasonably required
to prevent any such violation.
(b) As a condition to any sale or issuance of Shares
upon exercise of any Option, the Committee may require such
agreements or undertakings as the Committee may deem necessary or
advisable to facilitate compliance with any applicable law or
regulation including, but not limited to, the following:
(i) a representation and warranty by the Optionee to
the Company, at the time any Option is exercised, that he is
acquiring the Shares to be issued to him for investment and not
with a view to, or for sale in connection with, the distribution of
any such Shares; and
(ii) a representation, warranty and/or agreement to
be bound by any legends endorsed upon the certificate(s) for such
Shares that are, in the opinion of the Committee, necessary or
appropriate to facilitate compliance with the provisions of any
securities laws deemed by the Committee to be applicable to the
issuance and transfer of such Shares.
13. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by a committee
appointed by the Board (the "Committee") which shall consist of not
less than three Directors. The membership of the Committee shall
be constituted so as to comply at all times with the applicable
requirements of Rule 16b-3 promulgated under the Securities
Exchange Act. The Committee shall serve at the pleasure of the
Board and shall have the powers designated herein and such other
powers as the Board may from time to time confer upon it. Any
member of the Committee may be removed by the Board at any time,
with or without cause, and any vacancy on the Committee may be
filled by the Board.
(b) The Committee, from time to time, may adopt rules
and regulations for carrying out the purposes of the Plan. The
Committee's determinations and its interpretation and construction
of any provision of the Plan or any Option shall be final and con-
clusive.
(c) Any and all decisions or determinations of the
Committee shall be made either (i) by a majority vote of the
members of the Committee at a meeting or (ii) without a meeting by
the unanimous written approval of the members of the Committee.
14. WITHHOLDING OR DEDUCTION FOR TAXES
If at any time specified herein for the making of any
issuance or delivery of any Option or Common Stock to any Optionee,
any law or regulation of any governmental authority having
jurisdiction in the premises shall require the Company to withhold,
or to make any deduction for, any taxes or take any other action in
connection with the issuance or delivery then to be made, such
issuance or delivery shall be deferred until such withholding or
deduction shall have been provided for by the Optionee or
beneficiary, or other appropriate action shall have been taken.
15. INTERPRETATION.
(a) As it is the intent of the Company that the Plan
comply in all respects with Rule 16b-3 promulgated under the
Securities Exchange Act ("Rule 16b-3"), any ambiguities or
inconsistencies in construction of the Plan shall be interpreted to
give effect to such intention, and if any provision of the Plan is
found not to be in compliance with Rule 16b-3, such provision shall
be deemed null and void to the extent required to permit the Plan
to comply with Rule 16b-3. The Committee may from time to time
adopt rules and regulations under, and amend, the Plan in
furtherance of the intent of the foregoing.
(b) The Plan shall be administered and interpreted so
that all Incentive Stock Options granted under the Plan will
qualify as Incentive Stock Options under section 422 of the
Internal Revenue Code. If any provision of the Plan should be held
invalid for the granting of Incentive Stock Options or illegal for
any reason, such determination shall not affect the remaining
provisions hereof, but instead the Plan shall be construed and
enforced as if such provision had never been included in the Plan.
(c) This Plan shall be governed by the laws of the
State of Florida.
(d) Headings contained in this Plan are for conveni-
ence only and shall in no manner be construed as part of this Plan.
(e) Any reference to the masculine, feminine, or
neuter gender shall be a reference to such other gender as is
appropriate.
16. AMENDMENT AND DISCONTINUATION OF THE PLAN. The Com-
mittee may from time to time amend, suspend or terminate the Plan
or any Option; provided, however, that, except to the extent
provided in Section 10 hereof, no such amendment may, without
approval by the shareholders of the Company, (a) materially
increase the benefits accruing to participants under the Plan, (b)
materially increase the number of securities which may be issued
under the Plan, or (c) materially modify the requirements as to
eligibility for participation in the Plan; and provided further,
that, except to the extent provided in Sections 9 and 10 hereof, no
such amendment, suspension or termination of the Plan or any Option
issued hereunder shall substantially impair the rights or benefits
of any Optionee pursuant to any Option previously granted without
the consent of the Optionee.
17. EFFECTIVE DATE AND TERMINATION DATE. The effective
date of the Plan is the date on which the Board adopts this Plan,
and the Plan shall terminate on the tenth anniversary of the
effective date.
FORM OF PROXY
BISCAYNE APPAREL, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE COMPANY
The undersigned, a shareholder of BISCAYNE APPAREL, INC., a
Florida corporation (the "Company"), hereby appoints Earl W. Powell
and Phillip T. George M.D., and each of them, as proxies for the
undersigned, each with full power of substitution, and hereby
authorizes them to represent and to vote, as designated below, all
of the shares of stock of the Company held of record by the
undersigned at the close of business on April 3, 1995 at the Annual
Meeting of Shareholders of the Company to be held at the Grand Bay
Hotel, 2669 South Bayshore Drive, Miami, Florida, on May 24, 1995
at 9:00 a.m., local time, and at any adjournments thereof.
The Board of Directors unanimously recommends a vote FOR each
proposal.
1. ELECTION OF Harold E. Berritt,
DIRECTORS Lewis A. Engman,
Phillip T. George, M.D.,
Joseph B. Gildenhorn,
Kurt C. Gutfreund,
John W. Partridge,
James J. Pinto,
John E. Pollack,
Earl W. Powell and
Peter Vandenberg, Jr.
[ ] VOTE FOR all nominees listed above, except authority to vote
withheld from the following nominees (if any).
[ ] AUTHORITY TO VOTE WITHHELD from all nominees.
2. Proposal to approve the adoption of the Company's 1994
Stock Option Plan.
[ ] VOTE FOR [ ] VOTE AGAINST [ ] ABSTAIN
3. Upon such other matters as may properly come before
such Annual Meeting or any adjournments thereof. In
their discretion, the proxies are authorized to vote
upon such other business as may properly come before
the Annual Meeting and any adjournments thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED "FOR" ALL OF THE PROPOSALS.
(See reverse side)
(Continued from other side)
The undersigned hereby acknowledges receipt of (1) the Notice
of Annual Meeting for the 1995 Annual Meeting and (2) the Proxy
Statement.
Dated: , 1995
(Signature)
(Signature if held jointly)
IMPORTANT: Please sign exactly as your name appears hereon and mail
it promptly even though you now plan to attend the meeting. When
signing as attorney, executor, administrator, trustee or guardian,
please give full title as such. When shares are held by joint
tenants, both should sign. If a corporation, please sign in full
corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY USING THE
ENVELOPE PROVIDED. NO POSTAGE NECESSARY IF MAILED IN THE UNITED
STATES.
