DANSKIN, INC.
111 West 40th Street
New York, New York 10018
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INFORMATION STATEMENT PURSUANT TO
SECTION 14(f) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND RULE 14f-1 THEREUNDER
This Information Statement is being mailed on or about December __, 1997
as part of the Information Statement on Schedule 14C (the "Schedule 14C") to
holders of the common stock, par value $.01 per share ("Common Stock"), of
Danskin, Inc. (the "Company"). Capitalized terms used and not otherwise defined
herein shall have the respective meanings set forth in the Schedule 14C. You are
receiving this Information Statement in connection with the election of persons
designated by the Majority Stockholder to fill vacancies on the Board of
Directors of the Company.
GENERAL INFORMATION REGARDING THE COMPANY
General
The Company's outstanding voting securities as of December 1, 1997,
include 10,074,207 shares of Common Stock and 2,400 shares of Series D Preferred
Stock, which vote together with the Common Stock, on any matter brought to a
vote of the Company's stockholders. Each share of Series D Preferred Stock
entitles the holder thereof to one vote per share for each share of Common Stock
which would be issued upon conversion of a share of Series D Preferred Stock, or
16,666.66 votes per share of Series D Preferred Stock. The Majority Stockholder
holds a majority of the Series D Preferred Stock entitled to cast 38,528,781
votes or 76.9% of the votes entitled to be cast by the holders of all of the
Company's voting securities.
Majority Investors' Designees
The Securities Purchase Agreement provides that, subject to compliance
with applicable law and promptly following the Refinancing Closing, the holders
of the Series D Preferred Stock shall be entitled to designate such number of
directors (the "Designees") for election to the Board of Directors of the
Company as shall constitute a majority of the Company's Board. At a meeting of
the Board of Directors held on December 10, 1997, the Board amended the
Company's bylaws to increase the number of directors constituting the entire
Board of Directors from nine to ten. The Board of Directors then elected two
additional directors, Mr. Michael Hsieh and Mr. David Chu.
<PAGE>
to fill the two existing vacancies on the Board.
This Information Statement is required by Section 14(f) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 14f-1
thereunder.
YOU ARE URGED TO READ THIS INFORMATION STATEMENT CAREFULLY. YOU ARE NOT,
HOWEVER, REQUIRED TO TAKE ANY ACTION.
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DIRECTORS AND EXECUTIVE OFFICERS
Directors
Under the Company's Certificate of Incorporation, the Board of Directors
is divided into three classes, with each class being as equal in size as
possible. One class is elected each year. Directors in each class hold office
for a term of three years and until their respective successors are elected and
qualified. Prior to the Refinancing Closing, the number of directors
constituting the entire Board of Directors was ten, and the directors holding
office were Howard D. Cooley and Mary Ann Domuracki (Class I directors), Edwin
W. Dean and Henry T. Mortimer (Class II directors), and Patricia S. Patterson,
Larry B. Shelton, John W. Burden, III and Donald Schupak (Class III directors).
Two vacancies existed on the Board. In connection with the Refinancing, the
Company's bylaws were amended to reduce the number of directors constituting the
entire Board from ten to nine, and the Board accepted the resignations of Ms.
Patricia Patterson, Mr. John Burden and Mr. Edwin Dean as directors of the
Company and elected Mr. Andrew J. Astrachan, Ms. Nina McLemore, Mr. Gabriel
Brener and Mr. James P. Jalil (designated by Danskin Investors, the Majority
Stockholder) as directors of the Company. Thereafter, on December 8, 1997, Mr.
Howard D. Cooley resigned as a director of the Company. At a meeting of the
Board of Directors held on December 10, 1997, the Board amended the Company's
bylaws to increase the number of directors constituting the entire Board of
Directors from nine to ten. The Board of Directors then elected Mr. David Chu
and Mr. Michael Hsieh to fill the two existing vacancies on the Board. These new
directors will take office effective ten days after the date hereof.
Set forth below are the names of all directors (including the two
directors who will take office effective ten days after the date hereof) and
certain biographical information with respect to each such director.
Class II (Terms to Expire in 1997)
Andrew J. Astrachan, age 38, has been a director of the Company since
September 1997. He is the President and founder of Onyx Partners, Inc., an
investment bank. From 1985 to 1990, Mr. Astrachan was employed at Drexel Burnham
Lambert. Prior to that, he was a Vice President at Salomon Brothers Inc. from
1981 to 1985.
Gabriel Brener, age 38, has been a director of the Company since September
1997. He is President and CEO of Galco, Inc., an investment and management firm
headquartered in Los Angeles, California. Mr. Brener serves as an advisory board
member of each of Westin Hotels and Resorts, New Colt Holding Company and First
National Bank. He has previously served as Chairman of the Board for Valassis de
Mexico, S.A. de C.V. and has held board positions for several other companies.
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James P. Jalil, age 49, has been a director of the Company since September
1997. He has been a senior corporate partner with the law firm of Shustak Jalil
& Heller since 1992. Prior to that, Mr. Jalil was a corporate partner at Lane &
Mittendorf from 1982 to 1992.
Henry T. Mortimer, Jr., age 55, has been a director of the Company since
August 1992. He has been the Managing Director, Europe, of Financial Security
Assurance, Inc., a bond insurance company, and the President of American
International Advisory Group, Inc., a financial advisory firm, since 1985. Prior
to 1985, he was a Senior Vice President of E.F. Hutton & Co., Inc. in its
investment banking department. In addition, he is currently a director of
Tipiak, S.A., a French food manufacturing company.
Class III (Terms to Expire in 1998)
Donald Schupak, age 54, has been a director of the Company since October
16, 1996 and became the Chairman of the Board of Directors on March 27, 1997. He
is the Chairman of the Board of Directors of 7th Level, Inc., a technology
company that develops interactive tools and solutions primarily for on-line and
other network applications. He is also the Chief Executive Officer of Schupak
Group, an organization that provides strategic planning, management consulting
and corporate finance services to a variety of clients. Mr. Schupak founded the
Schupak Group in 1990 and has served as a director of Horn & Hardart Company.
From September 1988 through September 1990, he served as Chairman, Chief
Executive Officer and President of Horn & Hardart Company. From 1971 through
1980, Mr. Schupak was actively engaged in the practice of law with Schupak,
Rosenfeld & Fischbein, a New York City law firm founded by Mr. Schupak.
Larry B. Shelton, age 63, has been a director of the Company since October
1994. He is the President of Shelton & Associates, a management consulting firm
specializing in the apparel industry. In 1991, he retired as President and Chief
Operating Officer of Genesco, Inc., an apparel manufacturing company, having
served in that organization for over 35 years in various management capacities.
He has long been active in the apparel industry, having served as Chairman of
the Board of The American Apparel Manufacturing Association and as a board
member of The Clothing Manufacturers Association.
Michael Hsieh, age 39, will take office as a director of the Company
effective ten days after the date hereof. He has been the President and a
director of Li and Fung, a venture capital company, since 1986. He was
previously with R.H. Chapell Co., a San Francisco venture capital firm.
Class I (Terms to Expire in 1999)
Mary Ann Domuracki, age 43, became the Chief Executive Officer of the
Company on March 31, 1996, after having been its President and Chief Operating
Officer since July 1992, and has been a director since March 1989. From
September 1987 to June 1992, she was Vice President and Chief Financial Officer
of the Company. She joined the Company in June 1987 as its Controller. Prior
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to that, she was employed by Arthur Young & Co. (now known as Ernst & Young
LLP), a public accounting firm, from 1976 to 1987, and was the Audit Principal
responsible for the Company's account. She is a director of The American Apparel
Manufacturing Association and a member of its Marketing and Executive Committees
and is on the Board of Directors of Catholic Big Brothers, Inc.
David Chu, age 43, will take office as a director of the Company effective
ten days after the date hereof. He is the President, Chief Executive Officer and
chief designer of Nautica International, Inc., an apparel licensed product
company he founded in 1983. He is a member of the Counsel of Fashion Designers
of America (CFDA) and a director of the Educational Foundation for the Fashion
Industries (an advisory body to the Fashion Institute of Technology). In
addition, Mr. Chu is a trustee of The Asia Society and The China Institute.
Nina McLemore, age 52, has been a director of the Company since September
1997 and became the Vice Chairperson of the Board on December 10, 1997. She is a
Senior Managing Partner of Regent Capital Partners, L.P., a private investment
firm. She previously served as a member of the Liz Claiborne, Inc. Executive
Committee from 1993 to 1997 and was responsible for acquisitions, start-ups and
new business opportunities in 1996. Prior to that, Ms. McLemore was President of
Liz Claiborne Accessories from 1980 to 1993. She serves as a Director for Santa
Monica Amusements, Inc., Super Graphics, Inc. and Talton Holdings, Inc.
Directors and Executive Officers
The Directors and executive officers of the Company are as follows:
Name Position
---- --------
Donald Schupak............... Chairman of the Board
Nina McLemore................ Vice Chairperson of the Board
Mary Ann Domuracki........... Chief Executive Officer, Director
Beverly Eichel............... Executive Vice President, Chief Financial Officer
Andrew J. Astrachan.......... Director
Gabriel Brener............... Director
David Chu(1)................. Director
Michael Hsieh(1)............. Director
James P. Jalil............... Director
Henry T. Mortimer............ Director
Larry B. Shelton............. Director
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(1) To take office effective ten days after the date hereof.
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Beverly Eichel, age 39, has been the Executive Vice President of the
Company since April 1996, with responsibility for retail store operations.
Additionally, she has been the Chief Financial Officer of the Company since July
1992, having previously been its Controller since October 1987. Prior to that,
she was the Director of Accounting for MGM/UA Home Video from 1984 to 1987 and a
senior accountant with Ernst & Whinney (now known as Ernst & Young LLP), a
public accounting firm, from 1980 to 1984. She is a member of the American
Institute of Public Accountants in New York.
See "Directors" for biographies relating to directors and certain
executive officers.
During 1997, several changes occurred in the Company's executive officers.
In March 1997, Howard D. Cooley resigned as Chairman of the Board of Directors,
but remained a director. Donald Schupak was immediately thereafter elected
Chairman of the Board of Directors. On September 30, 1997, Edwin W. Dean
resigned as Vice Chairman of the Board of Directors, General Counsel and
Secretary. Each of the executive officers was elected by, and serves at the
pleasure of, the Board of Directors.
Board and Committee Meetings
The Board of Directors has met eleven times in 1997.
The Board of Directors presently has an Executive Committee, an Audit
Committee, a Compensation Committee and a Nominating Committee. The membership
of such committees reflects the new composition of the Board of Directors.
The Executive Committee is generally empowered to act on behalf of the
Board of Directors when the Board is not convened in meeting. The members of the
Executive Committee presently consist of Donald Schupak, Mary Ann Domuracki,
Nina McLemore and Andrew J. Astrachan. The Executive Committee has held one
meeting during 1997.
The Audit Committee is generally responsible for recommending the
appointment of the Company's independent auditors and overseeing the accounting
and internal audit functions of the Company, including reviewing, with the
Company's independent auditors, (i) the general scope of their audit services
and the annual results of their audit, (ii) the reports and recommendations made
to the Audit Committee by the independent auditors, and (iii) the Company's
internal control structure. The members of the Audit Committee presently consist
of Larry B. Shelton, Henry T. Mortimer, Michael Hsieh and James P. Jalil. The
Audit Committee has held one meeting during 1997.
The Compensation Committee is generally responsible for reviewing and
making recommendations to the Board of Directors concerning remuneration of the
Company's key
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employees, including executive officers. The Compensation Committee also grants
stock options pursuant to the Stock Option Plan. The members of the Compensation
Committee presently consist of Gabriel Brener, Donald Schupak and Michael Hsieh.
The Compensation Committee has not met during 1997.
The Nominating Committee is generally responsible for recommending
appropriate individuals to serve as members of the Board of Directors. The
members of the Nominating Committee presently consist of Donald Schupak, Andrew
J. Astrachan and Nina McLemore. The Nominating Committee has not met during
1997.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Directors
Directors who are employees of the Company are not compensated for serving
as directors. Directors who are not employees of the Company, other than those
appointed by Danskin Investors, receive an annual retainer fee of $12,000 plus
fees of $1,000 per day for attendance at meetings of the Board of Directors and
$500 per day for attendance at meetings of its committees. All non-employee
directors of the Company are reimbursed for out-of-pocket expenses. In addition,
each non-employee director receives, upon such person's initial election as a
director, a grant of an option to purchase 20,000 shares of Common Stock under
the Company's 1992 Stock Option Plan (the "Stock Option Plan") at fair market
value, exercisable in three equal installments on the first, second and third
anniversaries of the grant date.
Report of the Compensation Committee on Executive Compensation
The Compensation Committee, subject to the employment agreements described
below, reviews and recommends to the Board of Directors for its approval the
salaries and bonuses of the Company's key employees, including its executive
officers. In addition, the Compensation Committee grants stock options under the
Stock Option Plan to the Company's key employees, including its executive
officers, and otherwise administers the Stock Option Plan.
Compensation Philosophy
The Company's executive compensation program is designed to integrate
compensation with the achievement of the Company's short- and long-term business
objectives and to assist the Company in attracting, motivating and retaining the
highest quality executives.
Executive compensation is comprised of three components: (i) a competitive
base salary, which attracts talented managers and contributes to motivating and
rewarding individual performance; (ii) a cash incentive bonus, which integrates
financial reward with the achievement of the Company's short-term performance
objectives; and (iii) a stock option program, which is
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intended to promote the achievement of long-term performance goals and to align
the long-term interests of the Company's executive officers with those of the
stockholders.
The base salary and incentive bonus payable to two of the Company's
executive officers (Mary Ann Domuracki, Chief Executive Officer and Beverly
Eichel, Executive Vice President and Chief Financial Officer) are presently
governed by employment agreements entered into by the Company with each of such
executive officers. See "Employment Agreements." The Compensation Committee
conducts ongoing reviews of such employment agreements to ensure that they are
consistent with the Compensation Committee's current philosophy.
Although neither Mr. Schupak nor Ms. McLemore receives a salary from the
Company for their services, the Company provides for a payment of $10,000 per
month to defray the overhead expenses incurred by each individual in the service
of the Company.
Although the Compensation Committee has not yet formulated any overall
policy regarding qualifying compensation paid to the Company's executive
officers for deductibility under the limits of Section 162(m) of the Internal
Revenue Code of 1986, as amended, it has taken certain steps to try to ensure
that options granted under the Stock Option Plan will be deemed to be
performance-based compensation for purposes of Section 162(m).
Base Salary Compensation
The Compensation Committee continues to believe that the retention of
executives who have developed the skills and expertise required to lead the
organization is vital to the Company's competitive strength. It further believes
that attracting other key executives who can supplement the efforts of its
existing executives is absolutely critical. To this end, it is the Compensation
Committee's policy to continue to establish base pay at a competitive level.
Incentive Bonus Compensation
The Compensation Committee believes that compensation should vary with
corporate performance and that a significant portion of compensation should
continue to be linked to the achievement of business goals. Under the Company's
employment agreements with Ms. Domuracki and Ms. Eichel, the incentive bonus
award component of their compensation is subject to annual review by the Board
of Directors, taking into consideration the recommendation of the Chairman of
the Board and performance criteria.
Stock Option Grants
It is the policy of the Compensation Committee to award stock options to
executive officers and other key employees of the Company to align their
interests with those of the Company's long-term investors and to help attract
and retain such persons. The options, therefore, provide value
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to the recipients only if and when the market price of the Common Stock
increases above the option exercise price. To that end, there is ongoing review
by the Committee of the market price of the Common Stock and the exercise price
of options. It is the Committee's goal to preserve this incentive as an
effective tool in motivating and retaining executives.
On September 18, 1997, the Executive Committee of the Board of Directors
of the Company amended the Stock Option Plan to clarify that the Board of
Directors retains the discretion to determine the fair market value of the
Common Stock with respect to periods when the Common Stock is not actively
traded on the Nasdaq National Market or the Nasdaq SmallCap(TM) Market or any
other national exchange or under circumstances where significant transactions in
the Common Stock have occurred outside customary trading venues. Effective
October 1, 1997, a total of 239,943 options were repriced with an exercise price
of $0.625. All options granted prior to that date that were originally granted
at higher exercise prices (ranging from $1.875 to $4) were repriced, with the
exception of options granted to certain executives and outside directors. Under
the provisions of the Stock Option Plan, as a result of the change in control of
the Company, which occurred as a result of the Capital Contribution, 33,265
options that were not vested on or prior to such change of control, became fully
vested.
Also, in connection with the amendment of their respective employment
agreements, options to purchase 1,020,000 shares of Common Stock were granted to
Ms. Domuracki and options to purchase 680,000 shares of Common Stock were
granted to Ms. Eichel, at an exercise price of $.30 per share. In connection
with the Capital Contribution, the Company granted options to purchase 1,591,749
shares of Common Stock to Ms. McLemore, a director of the Company, at an
exercise price of $.30 per share. Such options were not issued under the Stock
Option Plan. The Company intends to file a Registration Statement on Form S-8 to
register the Common Stock underlying all such options.
Employment Agreements
On August 1, 1994, the Company entered into an employment agreement with
Mary Ann Domuracki employing her as President and Chief Operating Officer. This
agreement was amended as of April 4, 1996 to provide for her employment as Chief
Executive Officer. This agreement was further amended several times, most
recently on September 22, 1997 in connection with the Capital Contribution. Ms.
Domuracki's base salary compensation is presently $350,000, with such amount
subject to annual adjustment by the Chairman of the Board with the approval of
the Compensation Committee of the Board of Directors, but not to be less than
$350,000. The Board of Directors shall consider an annual bonus for Ms.
Domuracki for each fiscal year that she continues in the employment of the
Company, and shall grant such bonus in its discretion, taking into consideration
the recommendation of the Chairman of the Board and performance criteria. Under
the employment agreement, if the Company terminates her employment without
"cause," as defined therein, or if she resigns by reason of a "change of
control," as defined therein, (i) the Company will be obligated to continue her
base salary payments for two years thereafter, at the annual rate of $350,000
(offset by compensation received from any
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new employer after one year), (ii) the Company will make a prorated bonus
payment to her for the fiscal year then in progress and (iii) any granted, but
unvested, stock options that she holds (excluding the options granted in
connection with the amendment of her employment agreement described in the
succeeding paragraph) shall vest immediately.
In connection with the Capital Contribution, Ms. Domuracki's employment
agreement was amended in certain respects. Under the terms of the amendment (i)
Ms. Domuracki agreed to defer her right to resign after the "change in control"
which occurred as a result of the Capital Contribution and receive additional
compensation until the period commencing September 22, 1998 and ending 30 days
thereafter, (ii) the definition of "change in control" under the employment
agreement was changed, generally, to be deemed to occur only when (x) any person
acquires greater than 50% of the Company's securities or all or substantially
all of the Company's assets, or (y) a majority of the Company's directors
elected at any subsequent meeting of the Company's stockholders are not
nominated by the then current Board of the Company, (iii) the period of
noncompetition after a termination of employment was reduced from twelve months
to nine months, (iv) Ms. Domuracki was granted options to purchase 1,020,000
shares of Common Stock, at an exercise price of $.30 per share, of which options
to purchase 630,000 shares were immediately vested, and of which options to
purchase 130,000 shares will become vested on each of the first three
anniversaries of the Refinancing Closing, and (v) for each fiscal year after the
fiscal year ending December, 1997, the Chairman of the Board in consultation
with Ms. Domuracki will recommend the establishment of an annual bonus plan,
including such benchmarks and hurdles as shall be approved by the Board, for Ms.
Domuracki.
On August 1, 1994, the Company entered into an employment agreement with
Beverly Eichel employing her as Vice President and Chief Financial Officer. This
agreement was amended as of April 4, 1996 to provide for her employment as
Executive Vice President and Chief Financial Officer. This Agreement was further
amended several times, most recently on September 22, 1997 in connection with
the Capital Contribution. Her base salary compensation is $250,000, with such
amount subject to annual adjustment by the Chief Executive Officer with the
approval of the Compensation Committee of the Board of Directors, but not to be
less than $250,000. The Board of Directors shall consider an annual bonus for
Ms. Eichel for each fiscal year that she continues in the employment of the
Company, and shall grant such bonus in its discretion, taking into consideration
the recommendation of the Chairman of the Board and performance criteria. Under
the employment agreement, if the Company terminates her employment without
"cause," as defined therein, or if she resigns by reason of a "change of
control," as defined therein, (i) the Company will be obligated to continue her
base salary payments for two years thereafter, at the annual rate of $250,000
(offset by compensation received from any new employer after one year), (ii) the
Company will make a prorated bonus payment for the fiscal year then in progress
and (iii) any granted, but unvested, stock options that she holds (excluding the
options granted in connection with the amendment of her employment agreement
described in the succeeding paragraph) shall vest immediately.
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In connection with the Capital Contribution, Ms. Eichel's employment
agreement was amended in certain respects. Under the terms of the amendment (i)
Ms. Eichel agreed to defer her rights to resign after the "change in control"
which occurred as a result of the Capital Contribution and receive additional
compensation until the period commencing September 22, 1998 and ending 30 days
thereafter, (ii) the definition of "change in control" under the employment
agreement was changed, generally, to be deemed to occur only when (x) any person
acquires greater than 50% of the Company's securities or all or substantially
all of the Company's assets, or (y) a majority of the Company's directors
elected at any subsequent meeting of the Company's stockholders are not
nominated by the then current Board of the Company, (iii) the period of
noncompetition after a termination of employment was reduced from twelve months
to nine months, (iv) Ms. Eichel was granted options to purchase 680,000 shares
of Common Stock, at an exercise price of $.30 per share, of which options to
purchase 420,000 shares were immediately vested, and of which options to
purchase 86,666 shares will become vested on each of the first three
anniversaries of the Refinancing Closing, and (v) for each fiscal year after the
fiscal year ending December, 1997, the Chairman of the Board in consultation
with Ms. Eichel will recommend the establishment of an annual bonus plan,
including such benchmarks and hurdles as shall be approved by the Board, for Ms.
Eichel.
In connection with the closing of the Capital Contribution, Edwin W. Dean
resigned his position as Vice Chairman of the Board of Directors, General
Counsel and Secretary on September 30, 1997. Pursuant to the terms of the
employment agreement dated as of April 1, 1996, between Mr. Dean and the
Company, Mr. Dean will continue to receive compensation and benefits under such
agreement for the two-year period to follow his resignation (offset by
compensation received from any new employer after one year).
STOCK OPTIONS GRANTED IN LAST FISCAL YEAR
The following table shows information for the fiscal year ended December
28, 1996, respecting stock options granted to each named executive officer.
<TABLE>
<CAPTION>
Grant Date
Individual Grants ----------
Value
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Percent of Total
Number of Securities Options Granted to
Underlying Options Employees in Expiration Grant Date
Name Granted Fiscal Year Exercise Price Date Present Value(1)
- ------------------ -------------------- ------------------ -------------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Howard D. Cooley(4) 100,000(2) 59.5% 4.375 02/08/06 $324,461
100,000(3) 3.25 06/05/06 $241,028
Mary Ann Domuracki 0
Edwin W. Dean 0
Beverly Eichel 0
</TABLE>
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(1) The present values on the grant date are calculated under the
Black-Scholes valuation model. The Black-Scholes valuation model is a
mathematical formula used to value options, and considers historical stock
price volatility, the exercise period of the option and interest rates.
Historical price volatility has been measured since the effective date of
the Company's initial public offering on August 19, 1992. The
Black-Scholes valuation model was chosen in accordance with Securities and
Exchange Commission rules; however, this model should not be construed as
an endorsement of its accuracy at valuing options. The real values of the
options in this table depend upon the actual performance of the Common
Stock during the applicable period.
(2) These non-qualified stock options were granted under the Company's Stock
Option Plan and entitle the holder to purchase shares of Common Stock at
an exercise price equal to the fair market value per share of the Common
Stock as of the date the option was granted. At the time of the grant,
"Fair Market Value" was defined as the closing price of a share of Common
Stock on the Nasdaq National Market on the date of grant. All options
listed in this table were fully exercisable upon grant.
(3) Grant of these options is subject to shareholder approval to increase the
total number of shares reserved by the Stock Option Plan by at least an
additional 100,000 shares.
(4) On December 8, 1997, Howard D. Cooley resigned from the Board of
Directors.
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SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS,
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information, as of December 1,
1997, regarding the beneficial ownership of the Common Stock by: (i) each person
known to the Company to beneficially own more than 5% of the voting stock; (ii)
each director and each named executive officer; and (iii) all executive officers
and directors of the Company as a group. A person is a beneficial owner if he or
she has or shares voting power or investment power. At December 1, 1997, there
were outstanding 10,074,207 shares of the Common Stock and 2,400 shares of
Series D Preferred Stock.
<TABLE>
<CAPTION>
Beneficial Ownership
------------------------------------ Percent of
Name and Address Amount and Nature of Beneficial Outstanding
of Beneficial Owner Ownership Voting Securities*
- ---------------------------------------- ------------------------------------ ------------------
<S> <C> <C> <C>
Danskin Investors, L.L.C. (1) 48,160,980 Common Stock 80.7%
9595 Wilshire Boulevard 2,311.7 Series D Preferred Stock
Beverly Hills, CA 90212
The Oppenheimer Bond Fund For Growth (1) 5,318,636 Common Stock 10.2%
350 Linden Oaks 88.3 Series D Preferred Stock
Rochester, NY 14625
Donald Schupak (2) 5,392,315 Common Stock 9.7%
0 Series D Preferred Stock
Nina McLemore (3) 795,899 Common Stock 1.6%
0 Series D Preferred Stock
David Chu (4) 795,900 Common Stock 1.6%
0 Series D Preferred Stock
Mary Ann Domuracki (5) 736,803 Common Stock 1.5%
0 Series D Preferred Stock
Beverly Eichel (6) 501,576 Common Stock 1.0%
0 Series D Preferred Stock
Henry T. Mortimer, Jr. (7) 20,000 Common Stock .04%
0 Series D Preferred Stock
Larry B. Shelton (7) 20,000 Common Stock .04%
0 Series D Preferred Stock
Andrew J. Astrachan 0 Common Stock
0 Series D Preferred Stock 0%
Gabriel Brener 0 Common Stock
0 Series D Preferred Stock 0%
Michael Hsieh 0 Common Stock
0 Series D Preferred Stock 0%
James P. Jalil 0 Common Stock
0 Series D Preferred Stock 0%
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All directors and executive officers 8,262,493 Common Stock 14.1%
as a group (11 persons)(8) 0 Series D Preferred Stock
</TABLE>
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* For the purpose of this calculation, the outstanding voting securities of
the Company include 10,074,207 shares of Common Stock and 40,000,000 shares
of Common Stock, issuable upon the conversion of the Series D Preferred
Stock that the holders of the Series D Preferred Stock are currently
entitled to vote.
(1) The amount shown as Common Stock includes those shares of Common Stock
issuable upon conversion of the shares of Series D Preferred Stock held by the
beneficial owner and a presently exercisable warrant. Each share of Series D
Preferred Stock entitles the holder thereof to one vote per share for each share
of Common Stock which would be issued upon conversion of a share of Series D
Preferred Stock (16,666.66 votes per share).
(2) Includes 5,372,315 shares of Common Stock underlying a presently exercisable
warrant and 20,000 shares of Common Stock underlying presently exercisable
options which, if granted, would have vested upon the change of control
resulting from the Capital Contribution. Mr. Schupak was entitled to the
automatic grant of an option to purchase 20,000 shares of Common Stock upon his
appointment as a Director of the Company, but agreed to defer such grant until
an amendment to the Stock Option Plan has been approved by the stockholders,
increasing the total number of shares reserved for issuance upon exercise of
options granted thereunder.
(3) Includes 795,899 shares of Common Stock underlying presently exercisable
options.
(4) Includes 795,900 shares of Common Stock underlying a presently exercisable
warrant.
(5) Includes 3,800 shares held by Ms. Domuracki as custodian for her children,
as to which shares Mr. Domuracki has sole voting and investment power; 2,000
shares held by her spouse, as to which shares Ms. Domuracki disclaims beneficial
ownership; 6,619 shares beneficially owned by Ms. Domuracki through the
Company's Savings Plan, as to which shares Ms. Domuracki has sole voting and
investment power; and 724,384 shares underlying presently exercisable options.
(6) Includes 217 shares owned of record by Ms. Eichel, as to which shares Ms.
Eichel has sole voting and investment power; and 501,359 shares underlying
presently exercisable options.
(7) Includes, 20,000 shares underlying presently exercisable options.
(8) Includes 2,081,642 shares issuable upon the exercise of presently
exercisable stock options (including options to purchase 20,000 shares of Common
Stock to which Mr. Schupak became entitled upon his appointment as a director
described in Note 5 above) and 6,168,215 shares issuable upon the purchase of
shares of Common Stock pursuant to presently exercisable warrants.
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<PAGE>
By Order of the Board of Directors
/s/ Mary Ann Domuracki
----------------------------
MARY ANN DOMURACKI
Chief Executive Officer
New York, New York
December__, 1997
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