<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Biscayne Apparel, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
BISCAYNE APPAREL, INC.
----------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 4, 1997
----------------------------------------
To the shareholders of
Biscayne Apparel, Inc.
NOTICE IS HEREBY GIVEN that the 1997 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, June 4, 1997, at the Grand Bay Office
Plaza, 2665 South Bayshore Drive, Suite 800, Miami, Florida, for the following
purposes:
(1) To elect eight 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 vote upon a proposal to approve the Company's 1997 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 14,
1997 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,
/s/ PETER W. KLEIN
Peter W. Klein
Secretary
Clifton, New Jersey
April 25, 1997
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.
<PAGE> 3
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 1997 Annual Meeting
of Shareholders of the Company, to be held on the 4th day of June, 1997, or any
adjournment(s) thereof (the "Annual Meeting"), pursuant to the enclosed Notice
of Annual Meeting at the time and place indicated therein. The approximate
date this Proxy Statement and the enclosed form of proxy are first being sent
to holders of Common Stock is April 25, 1997. 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 eight directors to serve until the next Annual
Meeting of Shareholders or until their successors are duly
elected and qualified;
2. A proposal to approve the Company's 1997 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 eight nominees for director named
below, (ii) FOR approval of the Company's 1997 Stock Option Plan, and (iii) by
the proxies in their discretion upon any 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.
1
<PAGE> 4
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors has set the close of business on April 14, 1997
(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 10,741,819 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 a majority of
the outstanding shares of Common Stock is necessary to constitute a quorum. 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. 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 proposal to
approve the Company's 1997 Stock Option Plan will be approved if a majority of
the votes cast by shares of Common Stock on the matter are voted in favor of
the proposal. Any other matter that may be submitted to a vote of the
shareholders will be approved if the number of shares of Common Stock voted in
favor of the matter exceeds the number of shares of Common Stock voted against
the matter, unless the matter is one for which a greater vote is required by
law or the Company's Articles of Incorporation or Bylaws.
Abstentions are considered as shares present and entitled to vote for
purposes of determining the presence of a quorum and will be counted as votes
cast 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.) Accordingly, broker or nominee
non-votes will not have the same effect as a vote against the election of any
director or against the proposal to approve the Company's 1997 Stock Option
Plan. Abstentions will not have the same effect as a vote against the election
of any director but will have the same effect as a vote against the proposal to
approve the 1997 Stock Option Plan.
2
<PAGE> 5
SECURITY OWNERSHIP
The following table sets forth information with respect to the
beneficial ownership of the Company's Common Stock as of March 31, 1997 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 who owns any such shares
(see "Executive Compensation-Summary Compensation Table"), and (d) the
directors and executive officers of the Company as a group:
<TABLE>
<CAPTION>
COMMON STOCK
NAME AND ADDRESS OF BENEFICIAL OWNER(1) BENEFICIALLY OWNED(2)
--------------------------------------- ---------------------
SHARES PERCENT
------ -------
<S> <C> <C>
Trivest Special Situations Fund 1985, L.P.(3) . . . . . . . . . . . 1,757,836 16.4%
Earl W. Powell(4) . . . . . . . . . . . . . . . . . . . . . . . . . 723,308 6.7%
Phillip T. George, M.D.(5) . . . . . . . . . . . . . . . . . . . . 715,695 6.6%
Odyssey Partners L.P(6). . . . . . . . . . . . . . . . . . . . . . 566,776 5.3%
Kurt C. Gutfreund(7) . . . . . . . . . . . . . . . . . . . . . . . 415,541 3.9%
Joseph B. Gildenhorn(8) . . . . . . . . . . . . . . . . . . . . . . 103,662 1.0%
Peter Vandenberg, Jr.(9) . . . . . . . . . . . . . . . . . . . . . 72,948 *
James J. Pinto(10) . . . . . . . . . . . . . . . . . . . . . . . . 45,535 *
Harold E. Berritt(11) . . . . . . . . . . . . . . . . . . . . . . . 21,172 *
Directors and executive officers as a group (8 persons)(12) . . . . 3,855,697 35.1%
</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 and Dr. George
and his spouse are limited partners of TSSF. In addition, Messrs.
George, Pinto and Powell are limited partners of Associates.
(4) Includes (i) 648,338 shares of Common Stock directly owned; and (ii)
55,125 shares of Common Stock issuable upon exercise of presently
exercisable options granted pursuant to the Company's 1987 Stock
Option Plan; and (iii) 19,845 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 shares indicated as owned of record by TSSF (see footnote 3
above), 49,611 shares of restricted stock owned beneficially and of
record by Trivest, nor 200,000 shares issuable pursuant to a warrant
held by Trivest.
(5) Includes (i) 622,644 shares of Common Stock directly owned; and (ii)
52,258 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) 25,908 shares of Common Stock issuable upon exercise of
presently exercisable options granted pursuant to the Company's 1987
Stock Option Plan; and (iv) 14,885 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 shares indicated as owned of record by TSSF (see footnote 3
above) or 49,611 shares of restricted stock owned beneficially and of
record by Trivest, nor 200,000 shares issuable pursuant to a warrant
held by Trivest.
3
<PAGE> 6
(6) The beneficial owner's address is c/o Martin Byrnan, 31 West 52nd
Street, New York, New York 10019
(7) Mr. Gutfreund's address is 1333 North Kingsbury Street, Chicago,
Illinois 60622.
(8) Includes (i) 86,112 shares directly owned; (ii) 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 (iii) 11,250 shares of Common Stock issuable upon exercise of
presently exercisable options granted pursuant to the Company's 1994
Stock Option Plan. Mr. Gildenhorn's address is 1250 Connecticut
Avenue, NW, Washington, DC 20036.
(9) Includes (i) 17,523 shares of Common Stock directly owned; (ii) 23,888
shares of Common Stock issuable upon exercise of presently exercisable
options granted pursuant to the Company's 1987 Stock Option Plan;
(iii) 16,537 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) 15,000 shares
issuable pursuant to a warrant. Mr. Vandenberg's address is 1373
Broad Street, Clifton, New Jersey 07013.
(10) Includes (i) 2,313 shares of Common Stock directly owned; (ii) 31,972
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 (iii) 11,250 shares of common stock issuable
upon exercise of presently exercisable options granted pursuant to the
Company's 1994 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 (i) 9,922 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 (ii) 11,250 shares of Common Stock issuable upon
exercise of presently exercisable options granted pursuant to the
Company's 1994 Stock Option Plan. Mr. Berritt's address is 1221
Brickell Avenue, Miami, Florida 33131.
(12) Includes shares owned of record by TSSF and shares beneficially owned
by directors and executive officers, as described in the table and
footnotes above.
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 eight 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 1998 Annual Meeting of Shareholders,
expected to be held in June 1998, 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. Berritt has served as a director since
January 1993, Mr. Gildenhorn and Mr. Vandenberg have served as directors since
November 1994, Mr. Gutfreund has served as a director since December 1994 and
Mr. Lefler since March 1997.
4
<PAGE> 7
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME AGE POSITION(S) HELD WITH THE COMPANY
---- --- ---------------------------------
<S> <C> <C>
Earl W. Powell . . . . . . . . . . . . 58 Chairman of the Board, President and Chief
Executive Officer
Kurt C. Gutfreund . . . . . . . . . . . 59 Vice Chairman of the Board
Peter Vandenberg, Jr. . . . . . . . . . 42 Executive Vice President, Treasurer, Chief
Financial Officer and Director
Harold E. Berritt . . . . . . . . . . . 61 Director
Phillip T. George, M.D. . . . . . . . . 57 Director
Joseph B. Gildenhorn . . . . . . . . . 67 Director
R. Stephen Lefler . . . . . . . . . . . 47 Director
James J. Pinto . . . . . . . . . . . . 46 Director
</TABLE>
Mr. Powell has served as Chairman of the Board of the Company since
October 1985 and is also presently serving as President and Chief Executive
Officer. He has also previously served as President and Chief Executive Officer
of the Company at various times since October 1985. 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 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 ("Trivest"). Mr. Powell also serves as Chairman of the Board of
Directors of WinsLoew Furniture, Inc., a Nasdaq National Market company 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.
Mr. Gutfreund, a director of the Company since December 1994, has
served as the President and Chief Executive Officer of M&L International, Inc.
("M&L") and its predecessors since 1980, and has been associated with that
company since 1960. M&L has been a subsidiary of the Company since it was
acquired in November 1994.
Mr. Vandenberg, a Certified Public Accountant, joined the Company in
January 1987 and has served as Vice President (Executive Vice President since
December 1996), 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. Berritt was appointed a director of the Company in January 1993.
Mr. Berritt has been a shareholder of the law firm of Greenberg, Traurig,
Hoffman, Lipoff, Rosen & Quentel, P.A. since April 1, 1997, and was a partner
with, and later counsel to, the law firm of Rubin Baum Levin Constant &
Friedman from July 1995 to March 31, 1997. From 1969 until April 1995, Mr.
Berritt was a partner with the law firm of Pryor, Cashman, Sherman & Flynn. He
is a director of Claire's Stores, Inc., a fashion accessories retailer whose
shares are listed on the New York Stock Exchange.
5
<PAGE> 8
Dr. George has served as a director of the Company since October 1985
and previously served as Vice Chairman of the Board. 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. Dr. George's executive position with Trivest
has been his principal occupation since retiring from the private practice of
plastic and reconstructive surgery in February 1986.
Ambassador 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 Chairman of the Board of Franklin National Bank and a director of
Franklin Bancorporation, Washington, D.C. He also serves as a director of The
Mills Corporation, a real estate investment trust, traded on the New York Stock
Exchange.
Mr. Lefler was appointed a director of the Company in March 1997.
Since February 1997, Mr. Lefler has been President, Chief Executive Officer and
a director of Hartwell Sports, Inc., a manufacturer of sportswear, which is an
affiliate of Trivest. From 1982 through January 1997, he was employed by
Williamson-Dickie Manufacturing Company in various positions, most recently as
President and Chief Operating Officer.
Mr. Pinto, a director of the Company since December 1985, has been the
President of Private Finance Group Corp., an investment firm, since 1990. Mr.
Pinto also serves as a director of Andersen Group, Inc., an electronics
products company, and National Capital Management Corp., a specialty finance
company. MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held three meetings during 1996. 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 1996.
The Board of Directors has established three standing committees: (1)
the Executive Committee, (2) the Audit Committee, and (3) the Compensation
Committee.
Messrs. Powell and George are the members of the Executive Committee,
which held no meetings during 1996. 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. Gildenhorn (Chairman) and Pinto are the members of the Audit
Committee, which held one meeting during 1996. 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 (Chairman), Gildenhorn and Pinto are the members of
the Compensation 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 - Amended and Restated 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,
1994 Stock Option Plan and the 1997 Stock Option Plan. The Compensation
Committee held one meeting during 1996.
6
<PAGE> 9
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
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 for 1996 exceeded $100,000 (the "Named Executive Officers"), for the
fiscal years ended December 31, 1996, 1995 and 1994:
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------------------- ------------------------------------
AWARDS PAYOUTS
------- -------
OTHER LTIP ALL OTHER
NAME AND BONUS ANNUAL OPTIONS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) ($) COMPENSATION (#) ($) ($)
- ------------------------- ---- ---------- ----- ------------ ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Earl W. Powell 1996 --- --- --- --- --- ---
Chairman, President and 1995 --- --- --- --- --- ---
Chief Executive 1994 --- --- --- --- --- ---
Officer(1)
John E. Pollack 1996 300,000 --- --- --- --- 262,500(3)
President and 1995 360,672 --- --- --- --- ---
Chief Executive 1994 346,801 189,350 --- --- --- 3,288(2)
Officer(1)
Peter Vandenberg, Jr. 1996 170,000(4) 50,000 --- 15,000(4) --- ---
Executive Vice President, 1995 177,580 --- --- --- --- ---
Treasurer and Chief 1994 170,733 94,640 --- --- --- 3,288(2)
Financial Officer
</TABLE>
- -----------
(1) Mr. Powell was appointed Chief Executive Officer in December, 1996
following Mr. Pollack's resignation.
(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) $3,288 on behalf of Mr.
Pollack for 1994 and (b) $3,288 on behalf of Mr. Vandenberg for 1994.
(3) Represents (a) $75,000 of deferred 1996 salary that was paid to Mr.
Pollack following his resignation in December 1996, and (b) $187,500
in termination payments pursuant to the Company's 1993 employment
agreement with Mr. Pollack, payable in installments over a six-month
period.
(4) The subject compensation was pursuant to a Salary Deferral Agreement.
See "Employment Contracts and Termination of Employment Arrangements"
below.
7
<PAGE> 10
STOCK OPTION GRANTS
The following table sets forth information concerning the grant of
stock options to the Named Executive Officers in 1996. The Company did not
grant any stock appreciation rights in 1996.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------------ VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF STOCK
OPTIONS EXERCISE OR PRICE APPRECIATION FOR
GRANTED TO BASE OPTION TERM(2)
OPTIONS GRANTED EMPLOYEES IN PRICE
NAME (#)(1) FISCAL YEAR ($/SH) EXPIRATION DATE 5%($) 10%($)
- ------------------------ --------------- ------------ ------- --------------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Peter Vandenberg, Jr. 15,000 100% .75 12/31/2001 2,455 6,669
</TABLE>
- ----------------------
(1) Represents warrants granted pursuant to a Salary Deferral Agreement.
See "Employment Contracts and Termination of Employment Arrangements" below.
(2) Based on assumed annual rates of stock price appreciation from the
closing price of the Company's Common Stock on the date of grant. These amounts
represent assumed rates of appreciation only. Actual gains, if any, on stock
option exercises and Common Stock holdings are dependent on the future
performance of the Common Stock and overall stock market conditions.
STOCK OPTION EXERCISES AND FISCAL YEAR-END VALUE TABLE
No Named Executive Officer exercised stock options during the year ended
December 31, 1996. 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:
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR,
AND FISCAL YEAR-END OPTION VALUE
--------------------------------------------------------------------------------
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1996 DECEMBER 31, 1996 ($)
-------------------------------------- ---------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------------- ------------------ ----------------- ------------------
<S> <C> <C> <C> <C>
Earl W. Powell . . . . . . . . 74,970 13,230 -0-(1) -0-(1)
John E. Pollack . . . . . . . . 73,042 -0- 3,371 -0-(1)
Peter Vandenberg, Jr. . . . . . 40,425 11,026 -0-(1) -0-(1)
</TABLE>
- -------------------
(1) The closing sale price for the Company's Common Stock as reported by
the American Stock Exchange on December 27, 1996 was $.9375. As of such date,
no such options were in-the-money since the exercise price of the options
exceeded the fair market value of the underlying securities.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
Effective January 1, 1993, the Board of Directors approved an
employment arrangement with Mr. Vandenberg, the Company's Vice President,
Treasurer and Chief Financial Officer. Pursuant to this arrangement, Mr.
Vandenberg receives an annual base salary (currently $200,000 for 1997) which
is adjusted annually to reflect cost of living increases. Mr. Vandenberg may
also receive a performance-based bonus for 1997 based upon a
8
<PAGE> 11
forthcoming incentive plan for Mr. Vandenberg to be approved by the
Compensation Committee. Pursuant to a Salary Deferral Agreement as of March
31, 1996, Mr. Vandenberg agreed to reduce his 1996 base salary by $15,000 (the
"Deferral Amount") and to defer the Company's payment of such amount until a
later time as provided in such agreement. In connection with such deferral,
the Company granted Mr. Vandenberg a warrant for 15,000 shares of Common Stock
at a price of $0.75 per share. The number of shares issuable under the warrant
will be reduced by one share for each $1.00 of the Deferral Amount repaid to
Mr. Vandenberg.
Each of the Named Executive Officers has received 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.
Although no options have yet been granted under the Company's 1997 Stock Option
Plan, such options are likely to be granted with similar vesting terms. 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.
Mr. Powell, the Company's Chairman, was appointed the Company's
President and Chief Executive Officer in December 1996, and he was not
compensated by the Company or its subsidiaries during fiscal 1996. Mr. Powell,
and Dr. George (one of the Company's directors), are shareholders, directors
and executive officers of Trivest Inc., a company that 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."
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 for Mr. Pollack, the Company's Chief Executive
Officer, and Mr. Vandenberg, the Company's Chief Financial Officer, were fixed
at a level which the Compensation Committee believed was competitive with
amounts paid to senior executives with comparable qualifications, experience
and responsibilities. The annual performance bonus formula has been structured
to reward these executive officers for delivering profitable short-term
performance of the Company's operating units and the Company as a whole.
Except for the bonus paid to Mr. Vandenberg, the Compensation Committee did not
recommend any discretionary bonuses for any executive officers with respect to
1996, due in part to the Company's 1996 performance. The 1996 bonus for Mr.
Vandenberg was recommended by the Compensation Committee notwithstanding the
Company's 1996 performance, due to the Compensation Committee's belief that
such bonus was appropriate due to Mr. Vandenberg's efforts to improve the
Company's liquidity through debt reduction and renegotiation of the Company's
loan agreements, and his efforts in connection with the implementation of the
Company's restructuring plan.
Harold E. Berritt
Joseph B. Gildenhorn
James J. Pinto
9
<PAGE> 12
PERFORMANCE GRAPH
Set forth below is a line graph comparing 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.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG BISCAYNE APPAREL, INC., THE RUSSELL 2000 INDEX
AND THE S&P TEXTILE-APPAREL MANUFACTURER INDEX
[GRAPH]
<TABLE>
<CAPTION>
=======================================================================================
12/91 12/92 12/93 12/94 12/95 12/96
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Biscayne Apparel, Inc. 100 171.42 257.13 285.39 123.41 123.41
- ---------------------------------------------------------------------------------------
Russell 2000 100 106.45 80.48 78.83 88.53 121.63
- ---------------------------------------------------------------------------------------
S&P Textile-Apparel Mfg. 100 118.41 140.80 138.24 177.56 207.05
=======================================================================================
</TABLE>
* Assumes $100 invested on 12/31/91 in stock or index and reinvestment
of dividends.
10
<PAGE> 13
DIRECTOR COMPENSATION
The Company's standard arrangement for compensation of non-employee
directors is payment of 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.
In 1996, the non-employee directors agreed that, with respect to 1996 only, the
annual retainer would be paid to such directors as follows: (i) $3,750 paid in
cash, and (ii) options to purchase 11,250 shares of Common Stock granted to
each director under the Company's 1994 Stock Option Plan. Pursuant to such
arrangement, each of such directors received a cash payment of $3,750 in
January 1996 and were granted immediately exercisable options on March 26, 1996
to purchase 11,250 shares of Common Stock at an exercise price of $0.75 per
share (the fair market value of the Company's Common Stock on the day prior to
such grant).
Each of the Company's directors participates or is eligible to
participate in the Company's stock option plans, including the 1997 Stock
Option Plan. Except for the grants described in the preceding paragraph, no
options were granted in 1996 to any non-employee directors.
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, during the fiscal year ended December 31, 1996, all Section
16(a) filing requirements applicable to its officers, directors and greater
than ten percent beneficial owners were complied with.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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.
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). Effective January 1, 1996, the Restated
Management Agreement was amended to provide that the annual base compensation
payable to Trivest be reduced to $180,000 for 1996, plus a performance-based
cash payment generally limited to the amount of such reduction. Total 1996
cash compensation paid by the Company to Trivest was $180,000. Trivest has
agreed to continue such reduction for 1997 with a cost of living increase
resulting in current 1997 base compensation of $187,380. In connection with
the 1996 amendment, the Company issued Trivest a warrant to purchase 200,000
shares of Common Stock at a
11
<PAGE> 14
price of $0.75 per share. The warrant is exercisable until and expires on
December 31, 2001. The number of shares issuable under the warrant will be
reduced by one share for each $1.00 of the performance-based payment made to
Trivest.
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 which accounts for its time on an hourly basis and bills Trivest and
its affiliates, including the Company, for services rendered at prevailing
rates. In 1996, the Company paid Trivest $31,838 for services rendered by the
Trivest legal department. The Company believes that the fees charged by the
Trivest legal department in 1996 were no less favorable to the Company than
fees charged by unaffiliated third parties for similar services.
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 $18,156
in commissions from the Company's 1996 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 1996, the Company made
interest payments totaling $182,104 to TSSF as a result of its ownership of its
Notes.
12
<PAGE> 15
APPROVAL OF BISCAYNE APPAREL, INC.
1997 STOCK OPTION PLAN
The following resolution will be considered at the Annual Meeting:
RESOLVED, that the Company's 1997 Stock Option Plan, as
adopted by the Board of Directors of the Company (subject to
shareholder approval) on March 6, 1997, in the form of Appendix A of
the proxy statement for the 1997 Annual Meeting of Shareholders, is
hereby approved.
GENERAL
The Company's Board of Directors adopted the Company's 1997 Stock
Option Plan (the "Plan") on March 6, 1997, subject to the approval of the
Company's shareholders at the 1997 Annual Meeting.
The purpose of the Plan is to provide an additional incentive to
attract and retain qualified competent persons who provide management services
and upon whose efforts and judgment the success of the Company is largely
dependent, through the encouragement of stock ownership in the Company by such
persons. In furtherance of this purpose, the Plan authorizes, among other
things, the discretionary granting of incentive or nonqualified stock options
to purchase shares of the Company's Common Stock to persons selected by the
administrators of the plan from the class of all regular employees of the
Company (including directors and officers who are regular employees),
non-employee directors, and persons who provide consulting or other services to
the Company as independent contractors, which class presently consists of
approximately 935 persons. The Plan also provides for loans to participants to
finance the exercise of options and the payment of taxes in connection
therewith, and the use of already owned shares of Common Stock as payment of
the exercise price for options granted under the Plan.
Upon approval of the plan by the shareholders at the Annual Meeting,
the Company will cease granting any additional stock options under the
Company's existing stock option plans. All subsequent grants of options will
be made under the new Plan or other plans or arrangements that may be
implemented by the Company in the future.
One of the reasons for submitting the Plan for shareholder approval is
to ensure that awards under the Plan will qualify as performance-based
compensation for purposes of Section 162(m) of the Internal Revenue Code (the
"Code"). That section, which became law in 1994, generally disallows a tax
deduction for certain compensation over $1 million paid, or otherwise taxable,
to persons named in the Summary Compensation Table and employed by the Company
at the end of the year for which the deduction is claimed. Qualifying
performance-based compensation is not subject to the deduction limit if certain
requirements are met, including shareholder approval in the case of the Plan.
Shareholder approval of the Plan will also satisfy any applicable requirements
of the American Stock Exchange for shareholder approval.
A summary of the Plan is set forth below. The full text of the Plan
is annexed to this Proxy Statement as Appendix A, and the following summary is
qualified in its entirety by reference to Appendix A.
SUMMARY OF PLAN
The Plan limits the total aggregate number of options that any one
person can receive under the Plan to options for 100,000 shares of Common
Stock. The purpose of this limit is to help ensure that the Company's tax
deductions for compensation expense under the Plan are not limited by Section
162(m) of the Code.
13
<PAGE> 16
The Plan and the options granted thereunder are designed and intended
to be administered so that the grant of options under the Plan and transactions
thereunder will comply with the requirements for exemption under Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Rule 16b-3 exempts certain transactions involving the grant and exercise of
stock options under the Plan by directors, executive officers and principal
shareholders of the Company from the short-swing profit recovery provisions of
Section 16 of the Exchange Act.
The Plan provides that it shall be administered by a committee
consisting of not less than two directors designated by the Board of Directors
(the "Committee"), which directors shall be "outside directors" (i.e., a member
of the Board who qualifies as an "outside director" under Section 162(m) of the
Code and the regulations thereunder and as a "non-employee director" under Rule
16b-3). However, the Plan provides that the Board of Directors may grant
options to directors who are not employees of the Company or its subsidiaries
or to other persons who are eligible to receive grants under the Plan. The
Board has designated its Compensation Committee to administer the Plan.
Both the Board and the Committee have the power to determine the
persons to be awarded options, the number of shares subject thereto and the
exercise price and other terms thereof. In addition, both the Committee and
the Board have the power and authority to construe and interpret the Plan, and
the acts of the Committee or the Board are final, conclusive and binding upon
all interested parties, including the Company, its shareholders, its officers
and employees, recipients of grants under the plan, and all persons or entities
claiming by or through such persons.
An aggregate of 306,695 shares of Common Stock (subject to adjustment
as described below) are reserved for issuance upon exercise of options granted
under the Plan. The shares acquired upon exercise of options granted under the
Plan will be authorized and issued shares of Common Stock. The Company's
shareholders will not have any preemptive rights to purchase or subscribe for
any Common Stock by reason of the reservation and issuance of Common Stock
under the Plan. If any option granted under the 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 purposes
of the Plan.
OPTIONS GRANTED UNDER THE PLAN
No options have been granted under the Plan as of the date of this
Proxy Statement. The Company's management believes that options granted under
the Plan will be awarded primarily to those persons who possess a capacity to
contribute significantly to the successful performance of the Company. Because
persons to whom discretionary grants of options are to be made are to be
determined from time to time by the Committee or the Board in their discretion,
it is impossible at this time to indicate the precise number, name or positions
of persons who will hereafter receive such options or the number of shares for
which options will be granted.
CERTAIN TERMS AND CONDITIONS
All grants of options under the Plan must be evidenced by an Option
Agreement between the Company and the grantee. Such agreement shall contain
such terms and conditions as the Committee (or the Board) shall prescribe,
consistent with the Plan, including, without limitation, the exercise price,
term and any restrictions on the exercisability of the options granted. Such
terms often include the automatic termination of options upon certain events,
such as the death, disability or termination of employment of an optionee.
The price per share for discretionary grants may be any price
determined by the Committee (or the Board); provided, however, that in no event
shall the option price of any incentive stock option be less than the fair
market value per share of Common Stock on the date of grant. For purposes of
the Plan, and for so long as the Company's Common Stock is listed on the
American Stock Exchange, the term "fair market value" means the
14
<PAGE> 17
closing price of the Common Stock as reported on the American Stock Exchange on
the business day immediately preceding the date of grant, unless the Committee
or the Board shall determine otherwise in a fair and uniform manner. The
closing price per share of Common Stock on April 14, 1997 as reported on the
American Stock Exchange was $1.00. The exercise price of an option may be paid
in cash, by certified or official bank check, by money order, 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. The Plan also authorizes
the Company to make loans to optionees to enable them to exercise their
options. If the exercise price is paid with the optionee's promissory note,
the note must (i) provide for recourse to the optionee, (ii) bear interest at a
rate no less than the prime rate of interest of the Company's principal lender,
and (iii) be secured by the shares of Common Stock purchased. 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.
Already owned shares of Common Stock may be used to pay the exercise
price of an option in a single transaction or by "pyramiding" 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. In addition, the
amended Plan allows other forms of cashless exercise procedures approved by the
Committee or the Board.
Generally, options granted under the Plan are not assignable or
transferable, other than by will or by the laws of descent and distribution or
with the prior consent of the Committee or the Board. During the lifetime of
an optionee, an option is exercisable only by the optionee. The expiration
date of an option will be determined by the Committee or the Board 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 or the Board determines. The Committee or the
Board may in its sole discretion accelerate the date on which any option may be
exercised.
Each Option Agreement shall set forth when the unexercised portion of
any option granted under the Plan shall be terminated. To prevent dilution of
the rights of a holder of an option, the Plan provides for appropriate
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 increase or decrease in the number of issued and
outstanding shares of the Company's capital stock resulting from a stock
dividend, recapitalization or other capital adjustment of the Company. The
Committee or the Board has discretion to make appropriate antidilution
adjustments to outstanding options in the event of a merger, consolidation or
other reorganization of the Company or a sale or other disposition of
substantially all the Company's assets.
The Plan will expire on March 6, 2007, and any option outstanding on
such date will remain outstanding until it expires or is exercised. The
Committee or the Board may amend the Plan or any option at any time, provided
that such amendment may not substantially impair the rights of an optionee
under an outstanding option without the optionee's consent. Any such amendment
shall be subject to shareholder approval if necessary under any federal law or
state law or regulation (including, without limitation, Rule 16b-3 or to comply
with Section 162(m) of the Code) or under the rules of any stock exchange or
automated quotation system on which the Common Stock may be listed or traded.
FEDERAL INCOME TAX CONSEQUENCES
The Plan is not qualified under the provisions of Section 401(a) of
the Internal Revenue Code of 1986, as amended (the "Code"), nor is it subject
to any of the provisions of the Employee Retirement Income Security Act of
1974, as amended.
15
<PAGE> 18
Nonqualified Stock Options. An optionee granted a nonqualified stock
option under the 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 purchased pursuant to the exercise of the
option. This taxable ordinary income will be subject to Federal income tax
withholding, and the Company will be entitled to a deduction for Federal income
tax purposes equal to the amount of ordinary income 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 that amount.
If an optionee exercises a nonqualified stock option by delivering
shares of the Company's Common Stock, 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
nonqualified stock 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 nonqualified stock option paid for, in whole or in part, with
shares will be the same as if the optionee had exercised the nonqualified stock
option solely for cash.
Incentive Stock Options. The 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" (as 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 exercises 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 that 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 pursuant to the exercise of an incentive stock option exceeds
the exercise price of such shares under such option generally will be
16
<PAGE> 19
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.
Only employees of the Company or its subsidiaries qualify for the tax
treatment applicable to incentive stock options. Thus, optionees who are
non-employee advisors or consultants to the Company will be taxed solely under
the rules applicable to nonqualified stock options.
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 that amount.
Importance of Consulting Tax Adviser. The information set forth above
is a summary only and does not purport to be complete. In addition, the
information is based upon current federal income tax rules and therefore is
subject to change when those rules change. Moreover, because the tax
consequences to any optionee may depend on his or her particular situation,
each optionee should consult his or her tax adviser as to the Federal, state,
local and other tax consequences of the grant or exercise of an option or the
disposition of Common Stock acquired on exercise of an option.
VOTE REQUIRED AND RECOMMENDATION
The affirmative vote of a majority of the votes cast by the holders of
Common Stock will be required for approval of the Plan at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE
COMPANY'S 1997 STOCK OPTION PLAN.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company's independent public accountants for the year ended
December 31, 1996 were and for 1997 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.
17
<PAGE> 20
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 1998 Annual Meeting of Shareholders must deliver a proposal in writing to
the Company's principal executive offices on or before December 26, 1997.
By Order Of The Board Of Directors
/s/ PETER W. KLEIN
Peter W. Klein
Secretary
Clifton, New Jersey
April 25, 1997
18
<PAGE> 21
APPENDIX A
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BISCAYNE APPAREL, INC.
1997 STOCK OPTION PLAN
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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 incentive to attract and retain
qualified and competent persons who provide services to the Company and its
Subsidiaries, 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.
(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) "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 Quotation 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. If neither (i), (ii), or (iii)
above is applicable, then Fair Market Value shall be determined in good faith
by the Committee or the Board in a fair and uniform manner.
(f) "Incentive Stock Option" shall mean an incentive
stock option as defined in Section 422 of the Internal Revenue Code.
(g) "Internal Revenue Code" shall mean the Internal
Revenue Code of 1986, as amended from time to time.
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(h) "Non-Qualified Stock Option" shall mean an Option
which is not an Incentive Stock Option.
(i) "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.
(j) "Option" (when capitalized) shall mean any option
granted under this Plan.
(k) "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.
(l) "Outside Director" shall mean a member of the Board
who qualifies as an "outside director" under Section 162(m) of the Internal
Revenue Code and the regulations thereunder and as a "Non-Employee Director"
under Rule 16b-3 promulgated under the Securities Exchange Act.
(m) "Plan" shall mean this 1997 Stock Option Plan for the
Company.
(n) "Securities Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended from time to time.
(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 or the
Board may grant to Optionees from time to time Options to purchase an aggregate
of up to Three Hundred Six Thousand Six Hundred Ninety-Five (306,695) Shares
from the Company's authorized and unissued Shares. If any Option granted under
the Plan shall terminate, expire, or be canceled 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 determined by the
Committee or the Board at the time of grant of such Option and shall clearly
state whether it is an Incentive Stock Option or a Non-Qualified Stock Option.
All Incentive Stock Options shall be granted within 10 years from the effective
date of this Plan. Incentive Stock Options may not be granted to any person
who is not an employee of the Company or any Subsidiary.
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(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 Section 422(b) of the Internal Revenue Code 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 as defined in Section 424 of the
Internal Revenue Code), 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 or the
Board, provided such terms are not inconsistent with this Plan or any
applicable law. Optionees shall be (i) those persons selected by the Committee
or the Board from the class of all regular employees of , or persons who
provide consulting or other services as independent contractors to, the Company
or its Subsidiaries, including Directors and Officers who are regular
employees, and (ii) Directors or Officers who are not employees of the Company
or of any Subsidiaries. Any person who files with the Committee or the Board,
in a form satisfactory to the Committee or the Board, 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 or the Board 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 or the
Board shall determine. The Committee or the Board 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 or the Board 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 corporation [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 Optionee may not exceed 100,000 subject to
adjustment as provided in Section 10 hereof.
6. Option Price. The option price per Share of any Option shall
be any price determined by the Committee or the Board but shall not be less
than the par value per Share; provided, however, that in no event
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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 exercised 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 or the Board 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 or the Board in any
Option, and subject to such guidelines as the Committee or the Board may
establish, the option price of any Shares purchased shall be paid (1) in cash,
(2) by certified or official bank check, (3) by money order, (4) with Shares,
(5) by the withholding of Shares issuable upon exercise of the Option or by any
other form of cashless exercise procedure approved by the Committee or the
Board , or (6) in such other consideration as the Committee or the Board deems
appropriate, or by a combination of the above. The Committee or the Board 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, or
through the withholding of Shares issuable upon exercise of the Option, the
value of the Shares surrendered or withheld 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 collateralized 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 or the
Board shall provide in such Option, except as otherwise provided in this
Section 8.
(a) The expiration date of an Option shall be determined
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 on which the Option
is granted.
(b) The Committee or the Board may in its sole discretion
accelerate 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. The unexercised portion of any
Option shall automatically and without notice terminate and become null and
void at those times determined by the Committee or the Board and set forth in
the option agreement that evidences the Option.
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
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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, or available for grant to
any person 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 or the Board 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 or Board's sole discretion, such
adjustments become appropriate 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 a 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
adjustment 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, recapitalizations, 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) No Incentive Stock Option, and unless the prior
written consent of the Committee or the Board is obtained and the transaction
does not violate the requirements of Rule 16b-3 promulgated under the
Securities Exchange Act no Non-Qualified Stock 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, or in the case
of a Non-Qualified Stock Option that has been assigned or transferred with the
prior written consent of the Committee or the Board, only by the permitted
assignee.
(b) Unless the prior written consent of the Committee or
the Board 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.
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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 or the Board may require such agreements
or undertakings as the Committee or the Board 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 or the Board, necessary or appropriate to
facilitate compliance with the provisions of any securities laws deemed by the
Committee or the Board 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 be composed of two or more
Directors all of whom shall be Outside 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 and
Section 162(m) of the Internal Revenue Code. 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.
(b) The Board may grant Options pursuant to this Plan to
Directors who are not employees of the Company or any Subsidiary and/or other
persons to whom Options may be granted under Section 5(a) hereof.
(c) The Committee or the Board, from time to time, may
adopt rules and regulations for carrying out the purposes of the Plan. The
determinations by the Committee or the Board, and the interpretation and
construction of any provision of the Plan or any Option by the Committee or the
Board, shall be final and conclusive.
(d) 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 or beneficiary, 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.
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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 or the Board 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 convenience
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 Committee or
the Board may from time to time amend, suspend or terminate the Plan or any
Option; provided, however, that, any amendment to the Plan shall be subject to
the approval of the Company's shareholders if such shareholder approval is
required by any federal or state law or regulation (including, without
limitation, Rule 16b-3 or to comply with Section 162(m) of the Internal Revenue
Code) or the rules of any Stock exchange or automated quotation system on which
the Common Stock may then be listed or traded. Except to the extent provided
in Sections 9 and 10 hereof, no 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 March 6, 1997, the date on which the Board adopted this Plan, and
the Plan shall terminate on the tenth anniversary of such adoption.
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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 on the reverse, all shares of stock of the Company held of record by
the undersigned at the close of business on April 14, 1997 at the Annual
Meeting of Shareholders of the Company to be held at the Grand Bay Office
Plaza, 2665 South Bayshore Drive, Suite 800, Miami, Florida, on June 4, 1997 at
9:00 a.m., local time, and at any adjournments thereof.
(See reverse side)
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[X] PLEASE MARK YOUR
VOTES AS IN THE
EXAMPLE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH PROPOSAL:
1. ELECTION OF DIRECTORS VOTE FOR
all nominees listed at right
accept authority to vote AUTHORITY TO
withheld from the following VOTE WITHHELD
nominees (if any) from all nominees
[ ] [ ]
INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list at right:
NOMINEES: Harold E. Bendit
Phillip T. George, M.D.
Joseph B. Gildenhorn
Kurt C. Gutfreund
R. Stephen Leffer
James J. Pinto
Earl W. Powell
Peter Vandenberg, Jr.
2. Approval of the adoption of the Company's 1997 Stock Option Plan.
FOR 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.
The undersigned hereby acknowledges receipt of (1) the Notice of Annual
Meeting for the 1997 Annual Meeting, (2) the Proxy Statement, and (3) the 1996
Annual Report to Shareholders.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY USING THE ENVELOPE
PROVIDED. NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES.
SIGNATURE DATE
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SIGNATURE DATE
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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 an 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.
